Former England manager Fabio Capello will not become the new Liverpool manager, according to the Liverpool Echo.

The Italian boss was reportedly part of an eight-man shortlist drawn up by owners Fenway Sports Group after the sacking of Kenny Dalglish last week.

However, the 65-year-old is now understood to be out of contention for the position at Liverpool, having previously rejected the advances of Chelsea.

Fabio Capello
Capello will not be Liverpool boss. Reuters

Capello resigned as England manager in February after the Football Association chose to strip John Terry as captain, without first consulting him.

The removal of Terry as skipper came amid charges, which he denies, of using racial language, which will be heard on 9 July, while Capello publically backed the Chelsea defender in the wake of the FA's decision.

Formerly of Juventus and Real Madrid, Capello's experience saw him included on the shortlist to succeed Dalglish, with six Serie A titles, two La Liga titles and a European Cup to his name.

His spell with England saw him charged with uniting a group of players who have often been accused of not showing passion on the international stage, and a thumping exit at the hands of Germany in the 2010 World Cup emphasised the difficulty of his task.

This summer's European Championships were expected to be Capello's final major tournament as England boss, however a dispute with The FA over Terry saw him cut short his tenure.

Meanwhile, the shortlist to take over at Liverpool also includes Wigan Athletic manager Roberto Martinez, who has been subsequently interviewed for the role, Swansea City's Brendan Rodgers, who turned down the opportunity to speak to The Reds and former boss Rafa Benitez, who is currently unemployed.

Having won the domestic double with Borussia Dortmund, Jurgen Klopp was another to figure on the shortlist, followed by Barcelona's Pep Guardilola, Ajax boss Frank de Boer, ex-Chelsea manager Andre Villas-Boas and Marseille's Didier Deschamps.

Capello has also been linked with a move to Chelsea, who are yet to appoint a permanent replacement for Villas-Boas, with interim boss Roberto Di Matteo having won the FA Cup and the Champions League during his short spell in charge.

However, the Italian has been given no assurances over his future, despite delivering the cup double, with victories over Liverpool, and then Bayern Munich over the weekend.