Pereira's departure followed a disappointing loss to Fulham on Saturday, leaving Wolves at the bottom of the Premier League table with no wins.

O'Neil had been in discussions with Wolves' leadership about returning to the club, according to reports.

However, it appears that he has decided not to pursue the opportunity further, despite having made significant progress in negotiations.

O'Neil remains under contract with Wolves, receiving compensation as part of his 12-month severance package from his previous tenure as manager, which ended in December.

Erik ten Hag, a former Manchester United and Bayer Leverkusen coach, is also in talks with Wolves about the manager position.