The former Blues boss was reportedly lined up to assist Rafa Benitez in a consultancy role, but will not become a part of the Stamford Bridge backroom staff this season.
The former Blues boss, who guided the club to a Champions League final defeat to Manchester United in 2008, was rumored to be lined up to aid the Spaniard in a consultative role.
But despite having gone three games without a victory under Benitez, the Champions League holders have denied reports linking Grant with a return.
"There is no truth in reports that Avram Grant will be returning to the club," a spokesman for the club said.
Grant, who previously had difficult spells in charge of Portsmouth and West Ham, has been out of management since resigning from his role at Partizan Belgrade earlier this year.