The proposal, which was at the centre of Zelenskiy's talks with US Vice President JD Vance on the sidelines of the Munich Security Conference on Friday, did not offer any specific security guarantees in return, according to current and former senior officials familiar with the talks.
Zelenskiy's decision to reject a deal, at least for now, was described as "short-sighted" by a senior White House official.
"I didn't let the ministers sign a relevant agreement because in my view it is not ready to protect us, our interest," Zelenskiy told The Associated Press in Munich on Saturday.
The proposal focused on how the US could use Kyiv's rare earth minerals "as compensation" for support already given to Ukraine by the Biden administration and as payment for future aid, senior Ukrainian officials said speaking anonymously so they could speak freely.
Ukraine has vast reserves of the critical minerals used in the aerospace, defence and nuclear industries.
The Trump administration has indicated it is interested in accessing them to reduce dependence on China but Zelenskiy said any exploitation would need to be tied to security guarantees for Ukraine that would deter future Russian aggression.
"For me is very important, the connection between some kind of security guarantees and some kind of investment," he said.
Zelenskiy did not detail why he instructed his officials not to sign the document, which was given to Ukrainian officials on Wednesday by US Treasury Secretary Scott Bassent on a visit to Kyiv.
White House National Security Council spokesman Brian Hughes did not explicitly confirm the offer, but said in a statement: "President Zelenskiy is being short-sighted about the excellent opportunity the Trump administration has presented to Ukraine."
The Trump administration has grown weary of sending extra US aid to Ukraine and Hughes said a minerals deal would allow American taxpayers to "recoup" money sent to Kyiv while growing Ukraine's economy.
Hughes said the White House believed "binding economic ties with the United States will be the best guarantee against future aggression and an integral part of lasting peace".
"The US recognises this, the Russians recognise this, and the Ukrainians must recognise this," he said.
US officials in discussions with their Ukrainian counterparts in Munich were commercially minded and largely concentrated on the specifics of exploring the minerals and how to form a possible partnership to do that with Ukraine, the senior official said.
The potential value of the deposits in Ukraine has not yet been discussed, with much of the resources unexplored or close to the front line.
Any deal must accord with Ukrainian law and be acceptable to the Ukrainian people, the senior Ukrainian official said.
"Subsoil belongs to Ukrainians under the Constitution," Kseniiia Orynchak, founder of the National Association of Mining Industry of Ukraine has previously said.
Zelenskiy and Vance did not discuss the details of the US document when they met at the conference on Friday, the senior official said.
Zelenskiy told Vance real peace required Ukraine to be in a "strong position" when starting negotiations and said the US, Ukraine and Europe must be at the negotiating table for talks with Russia.
Despite the request, Trump's special envoy for Ukraine and Russia General Keith Kellogg all but cut Europeans out of any Ukraine-Russia talks.
"You can have the Ukrainians, the Russians, and clearly the Americans at the table talking," Kellogg said at an event hosted by a Ukrainian tycoon at the Munich conference.
Pressed on whether that meant Europeans would not be included, he said: "I'm a school of realism. I think that's not going to happen."
Ukraine was preparing a "counter-proposal" to be delivered to the US in "the near future", the official said.
