The 18-year-old midfielder has been training with St Johnstone and is poised to sign a permanent deal for the Europa League qualifiers.
Brown played three cup games for City last season, catching the eye at Northampton and Brentford, and was offered a senior contract in May.
But he has decided to return north after being told that he was well down the pecking order at Valley Parade, with Parkinson well stocked for options in that central area.
Parkinson said: “Scott’s a terrific lad and looks a good prospect. We had a chat about the situation here and he was keen to get back to Scotland.
“He’s a young lad away from home and this is a good chance for him.”
City were looking to send out Brown on loan for first-team experience and had contacted clubs at Conference North level.
Parkinson added: “We’ve also got young Jack Stockdill, who is someone we needed to be training with us.
“But Scott went up to Scotland for a trial game and it went well. I wish him all the best for the future.”