After more than 12 hours of talks, the southern African leaders grouping SADC told Mr Tsvangirai that he must share control of the powerful Home Affairs Ministry, which is responsible for the police, with President Robert Mugabe.
But Mr Tsvangirai, leader of the opposition Movement for Democratic Change, or MDC, says joint control will not work, and he is shocked by the summit's failure to tackle key issues.
Southern African leaders met in Johannesburg to try to break the political and economic crisis in Zimbabwe.
After eight weeks of negotiations, Mr Mugabe and Mr Tsvangirai have not been able to agree on a new cabinet.
South Africa's new president, Kgalema Motlanthe, had urged both sides to show "political maturity" and implement a deal reached after disputed polls.
Mr Motlanthe said he was disappointed that two months after the signing of a power-sharing agreement, the parties still had not formed an inclusive government.
Mr Tsvangirai and Mr Mugabe are unable to agree on how to share cabinet posts.
Mr Tsvangirai says the power-sharing deal must reflect the fact that his party won this year's election, and has compromised its position to share government with the party that lost.