Major League Baseball locked out its players shortly after midnight on Thursday as failure to agree on a new collective contract sparked the sport's first work stoppage since 1994.

Disagreement on how to divide $10 billion in revenues from the elite level of America's national pastime saw negotiations come to a halt on Wednesday afternoon, and after the collective bargaining agreement expired at 11:59 pm MLB announced it would lock out players.

In a "Letter to Fans" posted on Twitter, MLB commissioner Rob Manfred said he was disappointed that the league was "forced to commence a lockout of Major League Players, effective at 12:01 am on December 2."

Manfred said MLB executives believe an off-season lockout "is the best mechanism to protect the 2022 season.

"We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time.

"This defensive lockout was necessary because the Players Association's vision for Major League Baseball would threaten the ability of most teams to be competitive. It's simply not a viable option."

The shutdown is the first since the bitter player strike that wiped out the 1994 World Series and led to a shortened 1995 campaign once the dispute was resolved.

Even after games returned, fans were disenchanted and both attendance and television viewership plunged.

This stoppage comes in baseball's offseason, giving negotiators more than two months before the start of Spring Training camps and exhibition games that would lead up to the scheduled start of the regular season on March 31.

But Manfred was already ratcheting up the rhetoric, blaming the MLB Players Association for intransigence in negotiations so far.

"From the beginning, the MLBPA has been unwilling to move from their starting position, compromise, or collaborate on solutions," Manfred said in his statement, adding that the union "already had a contract that they wouldn't trade for any other in sports."

MLB and the MLBPA representatives had met again on Wednesday afternoon in suburban Dallas.

Major League Baseball has locked out its players, sparking the sport's first work stoppage since 1994
Major League Baseball has locked out its players, sparking the sport's first work stoppage since 1994 GETTY IMAGES NORTH AMERICA via AFP / Mark Brown

The union is seeking reduced revenue sharing among clubs and a drop from six years to five years for players to become eligible for free agency, measures that owners fear would make small market clubs uncompetitive.

The union has also pitched an expanded playoff proposal.

Owners offered several ideas last week, including an increase in minimum player salaries, creating a designated hitter rule for the National League that would end the practice of pitchers coming to the plate and the creation of an NBA-style lottery for top MLB Draft picks.

Manfred pointed to the fact that there is no salary cap in baseball and no maximum length or dollar amount on contracts as evidence that players are getting their share of baseball revenue.

He also rejected the idea that free agency is "broken," pointing to a rash of recent big-money free agent signings that included the Texas Rangers signing Corey Seager to a 10-year deal for a $325 million contract and 37-year-old star pitcher Max Scherzer signing a three-year deal for $130 million with the New York Mets.

"In the month of November $1.7 billion was committed to free agents, smashing the prior record by nearly 4x," Manfred wrote.

Free agency signings and trades will be suspended during the lockout as team officials and players are barred from communicating.

The MLBPA also issued a statement early Thursday morning, calling the lockout "a dramatic measure, regardless of the timing."

"It was the owners' choice, plain and simple, specifically calculated to pressure Players into relinquishing rights and benefits, and abandoning good faith bargaining proposals that will benefit not Just Players, but the game and industry as a whole," the union said.

"We remain determined to return to the field under the terms of a negotiated collective bargaining agreement that is fair to all parties, and provides fans with the best version of the game we all love."