The 34-year-old was a significant transfer target for Gills boss Andy Hessenthaler and was due to begin a trial at Priestfield on Tuesday.
Hessenthaler declared his interest in the former Reading and Brighton forward on Saturday but wanted to see the striker perform in training before making a decision.
But Owusu, who played with Gillingham assistant manager Ian Hendon at Sheffield Wednesday, has decided to sign a contract offer from Luton which will keep him at the Blue Square Premier club until the end of the season.
Source: PA
Source: PA