The Australian was sacked minutes after their 3-0 defeat to Chelsea having spent just over a month in charge, failing to win a single game across all competitions from eight attempts.
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Nottingham Forest have since been in talks with Sean Dyche and Roberto Mancini as they step up their pursuit of a Postecoglou replacement.
Now, according to Fabrizio Romano, Mancini, 60, won’t be the man to take over at the City Ground as the two parties failed to reach an agreement.
Mancini, who led Man City to their first Premier League title back in 2011-12, has been out of work since leaving the Saudi Arabia national team last October.