The Bolton man, who last fought in May 2016 when losing out to Canelo Alvarez in six rounds at 155 pounds, had hoped to face Pacquiao in the spring but negotiations for the bout were never completed.
“The fight made sense but the investors were a little bit slow and they needed a little bit more time,” Khan told Elie Seckbach’s ESNEWS during a gym visit.
“But I need to keep busy. Stylistically, it’s a great fight for me but let’s see. Pacquiao doesn’t struggle to get fights.”
Khan is now ready to move on in his bid to land a massive test at welterweight by the end of the year.
“It’s all about timing in this game and this is my time to shine,” said the former super-lightweight world champion.
“Manny being the number one welterweight, beating him would have given me the chance to win a world title again in the 147lb division.
“Then I could have taken on big names like Keith Thurman and the winner of Errol Spence and Kell Brook. The welterweight division is a very exciting one.
“(But) I need a tune-up fight to feel the hand out properly since the operation but I want to be back in the ring as soon as possible.
“Maybe I’ll take a UK fight for the UK fans and then go straight to a massive fight at the end of the year.
“We are just grinding away and hopefully we’re going to fight end of April or beginning of May,
“I’m just working it out and doing all the numbers. Within a week we should have something confirmed,” he added.