David Moyes is said to have been left 'stunned' by his West Ham United snub, as he was offered the job on a long-term basis last month.
The 55-year-old was told earlier this week that the short-term deal signed when replacing Slaven Bilic in November would not be renewed.
Former Manchester City boss Manuel Pellegrini is now expected to take charge in the coming days, but The Sun reports that Moyes was initially the Hammers' preferred choice.
Co-chairman David Gold and vice-chair Karren Brady reportedly asked the Scotsman to stay on for another year, but he was in favour of waiting until the end of the season before discussing terms.
A source is quoted by the publication as saying: "Everything pointed to David staying. They came to him but he chose to wait."
Pellegrini stepped down as manager of Hebei China Fortune on Saturday and is expected to arrive in London for talks early next week.
