The former Wolves and Sunderland manager wants to remain in the Premier League, but would be open to a return to international management
In the time since, the club’s new owners, the Al-Hasawi family, have appointed Sean O’Driscoll at the City Ground but initially had held talks with McCarthy following their dismissal of Steve Cotterill.
The Irishman has been out of a job since February when he was sacked by Wolves but turned down the Forest job with a view to managing in the Premier League once more.
McCarthy told The Irish Independent: "The primary reason is that I want to get a job in the Premier League.
"Whether that's going to happen or not, I don't know, because there isn't an awful lot of jobs going, of course, and it's not really a sacking league - well, it's got better that way."
The former Sunderland boss also revealed that he had just moved away from the area and would not return just for the sake of it.
"I'd also just moved out of the West Midlands," he continued. "I thought it would be wrong to go back and just take a club, especially a club like Nottingham Forest, which has a great history, for the sake of taking the club. I don't think anyone deserves that.
"We'll see what comes up. They all know I'm unemployed. There might be a club abroad that I might like."
With a six-year spell as manager of the Republic of Ireland behind him, McCarthy is open to returning to the international football fold, despite rejecting the opportunity to become South Korea’s new boss in 2007.
The 53-year-old added: "I'd say I would consider it again and that's not necessarily here because South Korea approached me a few years back; that job was mine, but I turned it down.
"I've had a number of enquiries as to whether I'd be interested in international jobs. But now, I want to be at a club, that's where I want to be."