Spain's Interior Ministry confirmed on Thursday that remains had been found close to the area where the child went missing in 2007.
The bones, which include a skull, were discovered close to the town of Vecindario, in the south-east of Gran Canaria, where Yéremi vanished outside his home on the afternoon of March 10.
"We are going to confirm whether or not the remains are those of Yéremi Vargas," Jorge Fernández Díaz, Spain's Interior Ministry, had told a press conference on Thursday morning.
The remains were flown from the Canary Island to Madrid to undergo forensic testing at a laboratory in the capital.
But DNA testing from samples given by the boy's family proved that the remains did not belong to Yéremi, sources close to the investigation told El Pais.
According to initial investigations by pathologists the skull was thought to belong to a boy aged between five and 12 years-old.
But on Thursday, it emerged that the skull might in fact have been that of an elderly woman, according to the local newspaper Canarias Ahora.
The bones were discovered by a resident, according to the Guardia Civil, who sent out a specialist investigation team from Madrid to the area.
The family had been anxiously awaiting the results of the DNA tests, confirmed the husband of Yéremi's mother, Ithaysa Suárez.
"We are as any family would be, nervous, basically," Jonathan Guisado told Spanish news agency Efe from the family home. "We are waiting for the DNA analysis."
The mystery of Yéremi Vargos disappearance has been a high profile case in Spain and was linked to that of Madeleine McCann, who vanished just two months later in the Algarve.
Detectives had explored the theory that Yéremi was a victim of paedophile and earlier this year had flown to Scotland to interview two convicted paedophiles serving life sentences.
Both Charles O'Neill and William Lauchlan, who serving life in prison for killing a woman who planned to report them for abusing a young boy, had been on the island at the time of Yeremi's disappearance.