A Champions League winner during his time as a player at Liverpool, Alonso had been quickly installed as the favourite to succeed Jurgen Klopp after the German made his shock announcement in January that he will leave at the end of the season.
Sporting Lisbon coach Ruben Amorim is the new front-runner with the bookmakers ahead of Brighton manager Roberto De Zerbi and Germany boss Julian Nagelsmann.
Alonso's decision to remain with Leverkusen, who are unbeaten in 38 games in all competitions this season, ends Liverpool's hopes his arrival would soften the blow of Klopp's impending departure.
The Reds' fortunes on and off the field have been transformed during Klopp's eight-and-a-half years in charge. Liverpool won their first league title for 30 years in 2020, a year after lifting the Champions League. Klopp is on course to leave in a blaze of glory.
Liverpool are behind Premier League leaders Arsenal only on goal difference with 10 games to go. They also lifted the League Cup last month and could yet face Alonso's Leverkusen in the Europa League final with both sides into the last eight.
Klopp believes he is passing the baton over at a perfect time with a squad packed full of young talent, aided by a core of world class veterans in Alisson Becker, Virgil van Dijk and Mohamed Salah.
"For the future it is important how good is the team, how good are the players, how good is the structure and how good is the organisation," Klopp said earlier this month. "That's where my optimism comes from and that's why I think it's a rather good moment to be with LFC."
However, following in the footsteps of a figure with such legendary status may have been one of the factors to discourage Alonso to make the jump. Reports suggest his snub is set
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