Wigan boss Paul Jewell thought that a £200k deal had been agreed for the 25-year-old former Dunfermline striker.
However, BBC Sport report that Leeds showed an interest over the weekend. Wigan remain firm favourites to sign Graham, who scored 23 goals last season as Torquay finished third in Division Three.
Jewell said: "The David Graham deal is all agreed at just over £200,000. He is on holiday at the moment, but I'm meeting him next week, when there shouldn't be a problem. If we can bring him in, he will be a great addition."
Graham, who began his career with Rangers, joined Torquay from Dunfermline in 2001.