ATLANTA -- The trade that would have sent offensive tackle Michael Thompson from the Atlanta Falcons to Miami for a 2004 draft choice was canceled Thursday, ESPN.com has learned, when the three-year veteran did not pass the Dolphins physical exam.

Miami was to have sent the Falcons a seventh-round choice in the 2004 draft, which could have been upgraded to a fifth-round pick, if Thompson participated in 50 percent of the snaps in 2003. The only caveat to the trade was that Thompson, a three-year veteran, pass the Dolphins-administered physical exam.

Sources said that Dolphins physicians felt there was a knee problem that made Thompson a risk and told Miami officials they could not recommend the deal. Physical exams are fairly subjective in the NFL, with no leaguewide standards, and final decisions are typically made by a club's football officials after consulting with its medical staff.

The Dolphins were set to sign Thompson to a two-year contract worth $1.4 million and the deal included a $150,000 signing bonus. Thompson, 26, was a restricted free agent this spring and last month signed a one-year, $605,000 qualifying offer Atlanta had made to retain his rights.

Because the trade was contingent on Thompson passing the physical, he now returns to the Falcons roster, under terms of the one-year contract.

His return to the Falcons could be a brief one, though, as the team has revived an earlier deal with Seattle and could now trade him to the Seahawks. Thompson was en route to Seattle on Thursday night got another physical exam and, if he passes, will probably be traded.

The Falcons last month discussed a Thompson swap with the Seahawks and San Francisco 49ers, both of whom were believed to have offered middle-round draft choices in return.

The trade to Miami would have provided Thompson, a fourth-round choice in the 2000 draft, an opportunity for increased playing time and perhaps even a starting spot. Miami has been attempting to acquire a young offensive tackle over the past few months and will now resume that search.

A former Tennessee State standout, Thompson has been limited, because of circumstance and injury, to 12 appearances and four starts. But scouts feel he possesses excellent athletic tools and, at age 26, he still has enough time to develop into a starting-caliber player.

In another Dolphins-related item, linebacker Scott Galyon has informed coach Dave Wannstedt that he plans to retire. Galyon, 29, is a seven-year veteran who played the last three seasons with the Dolphins. He currently is an unrestricted free agent but Miami had made recent overtures about the possibility of re-signing him.

Galyon played in 95 games and started four in his career.

Len Pasquarelli is a senior writer for ESPN.com.