16-year-old Fry, who has represented Wales at youth level, has been interesting a number of big teams including Leeds United.
However, the bid has been rejected and he will be staying in the Tigers youth team.
Juniors coach Billy Russell said: "The lad wants to stay here, he's a local lad and his ambition is to play first-team football for Hull City and the chairman has made it clear that we want to keep our promising youngsters at the club. I don't know what was said but the offer was rejected."
Meanwhile, Chris Dixon, Danny Mulchinock, Glen Kaveney and Anthony Bowsley have been released after coming to the end of their three-year junior contracts. Steve Burton and Nathan Peat have been given one-year contracts, and Gary Bradshaw has a season left to run on his pro contract.