Daejeon had completed a summer transfer for the player, who was unveiled in a club shirt.
But having undergone tests with club doctors, it was revealed that the player had contracted the disease.
Daejeon immediately cancelled their contract offer.
Once fatal, AIDS sufferers can live with the disease today thanks to medical advances.
The club said it would be stepping up moves to sign more players.
A club spokesman said: "We will not let his happen again."
Daejeon have been out of the top flight in the K-League since 2016 and finished second from bottom in the second tier last year.
The Korean club had recruited massively but of 60 players registered, some 26 did not feature at all.
Romanian striker Aurelian Chitu was the club's top scorer with 13 goals and most valuable player.
Daejeon boss Lee Heungsil identified which areas of the pitch the citizen club need to strengthen.
He said: "We need someone who can score goals, a player who can finish.
"We need a centre back as well as a defensive midfielder, those are some positions which I feel we can strengthen but a striker is what's the most urgent, I feel."
Winless since April, the club signed a contract with Brazilian League clubs Fortaleza Esporte Clube and Fluminense yesterday (July 13) to sign B team players on loan without paying a fee.
Daejeon would also have the option of paying a full transfer fee if these loans proved successful.
Mario Bittencourt, the chairman of Fluminense, said: “We hope the two clubs can build a friendly relationship through the agreement. Also, we hope to help Daejeon Citizen win promotion to the first division.”
Marcelo Paz, chairman of Fortaleza Esporte Clube, said: “We hope that the two teams will develop together through the exchange of first team and youth players.”
Source: The Sun