The 47-year-old, who won the 2006 FIFA World Cup with Italy, had been reported as one of the leading candidates to replace Gennaro Gattuso after Pep Guardiola declined the role.
However, concerns over Pirlo's ambassadorial role with Russian bookmaker Fonbet led to criticism from Italian Football Federation (FIGC) officials and members of Italy's parliament.
Pirlo addressed the issue on social media, revealing he had been informed on Sunday that he was no longer being considered for the position.
"After learning last night that I am no longer the candidate to lead the Italian national team, I believe it is my duty to clarify a few points," Pirlo said.
"Over the past few days, I have watched with great bitterness the debate that has developed around my name and the possibility of taking on the role of head coach of the Italian national team.
"Throughout my career, first as a player and now as a coach, I have always carried out my work in full compliance with the laws of the countries where I have worked and with the contracts I have signed."
Pirlo, who currently manages United FC in Dubai, signed a commercial ambassador agreement with Fonbet in October. He insisted the partnership was purely a business arrangement and had no political meaning.
"To assign a political meaning to that collaboration is to attribute to me beliefs that I have never expressed and that do not belong to me," he said.
The former midfielder faced increased criticism after appearing alongside former Italy teammate Marco Materazzi at Moscow's Luzhniki Stadium during a Fonbet event while Russia's war in Ukraine continues.
Russia's ambassador to Italy, Alexey Paramonov, publicly backed Pirlo, saying it was disappointing to see one of Italy's greatest football figures criticised because of the partnership.
Meanwhile, FIGC technical director Paolo Maldini has the task of selecting Italy's next national team coach. The new manager will be expected to guide the four-time world champions back to the FIFA World Cup after the Azzurri failed to qualify for the last three editions of the tournament.
FIFA president Gianni Infantino has defended the 2026 FIFA World Cup, accusing critics of spreading "hate" and "false rumours" while insisting the tournament was a success that united football fans around the world.
Chelsea manager Xabi Alonso believes new signing Morgan Rogers has everything needed to make an immediate impact at Stamford Bridge and says the England international will strengthen the club's attacking options.
Thibaut Courtois believes Belgium have appointed the right man after Mark van Bommel was named the national team's new head coach, with the Real Madrid goalkeeper praising the former Netherlands international's experience and leadership.
Coach Roger de Sa believes Ghana can take pride in their performance at the 2026 FIFA World Cup, but admits the Black Stars were left wondering what might have been after a controversial goalless draw against England.
