Julen Lopetegui has turned down the chance to take over as Wolves manager citing family reasons.
Lopetegui, who was sacked by Sevilla last week, had been the preferred choice to take over from the sacked Bruno Lage.
Wolves executive chairman Jeff Shi held lengthy talks with the former Real Madrid head coach this week after travelling to Spain.
Lopetegui is represented by super agent Jorge Mendes – a close associate of the Wolves ownership – and was the first candidate that the Midlands club approached, but they will now move on to other targets.
U18 coach Steve Davis and U21 coach James Collins are currently taking interim charge of the first team while the search for a successor continues.
They oversaw a 3-0 loss at Chelsea in their first game following Lage’s sacking at the beginning of the month.
Wolves are currently in the relegation zone having gained just six points from their opening nine Premier League games, during which time they have scored just three goals.