NFL Network insider Jason La Canfora cited a league source Tuesday to report Parcells has informed the Saints he will stay retired.
The team now is likely to hire from within, with Sports Illustrated's Peter King reporting that another big-name candidate, Tony Dungy, also is out of the running.
Parcells' tight relationship with Payton made him an intriguing candidate for the job. With Payton set to serve a season-long suspension for his role in the team's "bounty" program, Parcells was seen as a figure who could step in and seamlessly shepherd the organization through what promises to be a very interesting 2012 campaign.
Parcells is a competitor to the core. The idea of one more turn as head coach was attractive enough to bring him into the conversation for the job, but he has avoided a circus by turning down the Saints. A circus that, with Parcells being 70 years old, is better suited for someone else.
Internal candidates include offensive coordinator Pete Carmichael Jr. and defensive coordinator Steve Spagnuolo, and both men offer consistency for an organization deeply in need of a steady presence inside the building. Spagnuolo didn't exactly tear the doors off in St. Louis, but with three seasons of head-coaching experience under his belt, he has spent enough time with Payton to move the team forward without recreating the wheel.
Another possibility: Carmichael, Spags or another internal hire guides the team through the first six weeks of the season until assistant head coach Joe Vitt returns from his suspension to take the reins.
It would have been an intriguing ride, seeing Parcells roam an NFL sideline again. It made sense from more than one angle, too. But Parcells is doing what's right for Parcells this time around.