Rob Edwards has turned down an approach from Burnley, leaving the Clarets still looking for a new manager.
Edwards, who was surprisingly sacked as Wolves head coach earlier this month, had been a candidate for the Turf Moor job.
He was under consideration even while Burnley pursued Craig Bellamy to replace Scott Parker, only for Bellamy to have a last-minute change of heart and opt to stay with Wales.
It means Burnley remain without a manager two months after Parker’s departure following the club’s relegation from the Premier League.
Burnley’s squad were due to return for pre-season fitness checks on Monday and will travel to the United States for a tour next month, with their first game, against FC Cincinnati, on 11 July.
Edwards was available after his Wolves exit, which came after the club had backed the 43-year-old, despite relegation from the Premier League.
He joined from Middlesbrough in November, with the club turning to their former defender to stabilise them and bring them back to the top flight, but he was replaced by Portuguese coach Cesar Peixoto.