The 64-year-old talent manager said One Direction's hiatus has turned into a long-term break, reported Digital Spy.
"It's over, they had their run, all over. It's done and it was an amazing career," he said.
Walsh then revealed that they might get back together at some point in distant future but not in 2017, may be in ten years.
"They were the best things to come out of the 'X Factor' financially. We create monsters in the music business - they only become famous because they have been on the show and we got you those songs.
"They are lucky, but some get a sense of entitlement and believe the hype. Too many artists appear to forget where they came from," he added.
One Direction originally composed of Niall Horan, Liam Payne, Harry Styles, Louis Tomlinson and Zayn Malik, until his departure from the band on March 25 last year.
Payne also went solo in July this year after revealing on Twitter that he had signed a recording deal with Capitol Records and will release his own album in late 2016 or early 2017.