Atletico Madrid Coach Diego Simeone turned down the offer to take on the Inter job next season, according to Marca.
There had been multiple reports in Italy that Cholo was their first choice for the position after Antonio Conte committed his future to Chelsea.
The club was prepared to offer a blank cheque and sweeping directorial powers over the transfer strategy.
However, Marca’s online site claims Simeone rejected the proposal following his entourage’s meeting with director of sport Piero Ausilio.
Simeone had played for Inter from 1996 to 1999 and already has some Serie A management experience thanks to a short spell at Catania in 2011.
Now the Nerazzurri have to consider other options, including Roma boss Luciano Spalletti and ex-Villarreal Coach Marcelino.