Ugarte instead joined Championship rivals Crewe after scoring 22 goals in a struggling Wrexham side last season.
The 24-year old said: "I was interested in signing for Cardiff, I had talks with them and I thought they were going to offer me a contract.
"I think Lennie Lawrence was really interested in signing me, but he was axed and City were waiting to bring in a new boss.
"Cardiff kept telling me to wait and wait. But I had to make a decision. I couldn't keep on waiting and had to sort out my future."
Ugarte will be likely to face Dave Jones' side at Ninian Park on October 22, with the Bluebirds still looking for strikers following the sale of Peter Thorne to Norwich City.