Vettel had been linked with a move to Mercedes at the end of the 2018 season when Lewis Hamilton’s current deal expires, but the German has now signed a three-year extension with Ferrari.
Lauda was quizzed about Mercedes’ involvement with Vettel since the start of the year and suggested that talks had taken place between two parties.
“We discussed it briefly once with him, but the more competitive Ferrari goes the less the reason he would want to leave,” Lauda told Sky F1.
“So therefore we stopped right away a couple of months ago.”
Wolff was later asked to confirm Lauda’s comments, but he strongly denies any negotiations took place.
“I think it is a bit of miscommunication,” Wolff said to Sky F1.
“We never once had negotiations with Vettel. Zero. I think what Niki was referring to was they crossed each other paddock and he asked him what he is doing next year.