The news will come as a blow to Millers fans following the remarkable Great Escape from Championship relegation orchestrated by the 67-year-old Yorkshireman after he arrived at the club on a short-term basis in February following the sacking of Neil Redfearn.
Discussions have been held over the past few weeks between Warnock, chairman Tony Stewart and the club’s hierarchy - who were desperate for the ex-Sheffield United and Leeds manager to pledge his future to the Millers.
But talks have failed to yield a positive outcome.
A Millers statement read: “Following lengthy and protracted discussions over the past two weeks, Rotherham United can confirm that Neil Warnock will not be the manager of the club going forward.
“We would like to place on record our thanks to Neil and his support staff for the 16 games that they led the team at the end of the 2015/2016 campaign, and wish Neil, (assistant) Kevin (Blackwell) and (coach Ronnie (Jepson) health and happiness for the future.
“We will be looking to release details of a new managerial appointment in due course.”
Warnock won six and draw six of his 16 matches in charge, losing four games, with the Millers finishing the season in 21st place.
Warnock’s decision means that the Millers are looking for the fourth full-time manager in eight months.