Some newspaper reports on Tuesday morning suggested the Magpies boss would have to sell Martins to raise transfer cash.
But Allardyce himself described the speculation as "complete and utter fabrication", and says the striker is going nowhere.
The Nigerian was a big hit during his first season on Tyneside, netting 17 goals following his £10million transfer from Inter Milan.
Allardyce told the Toon's official website: "This story is complete and utter fabrication. There's nothing in it whatsoever."
Last week Martins had told Newcastle World: "I am very, very happy here so I am not going anywhere."