Shearer, a former Rovers player who won the Premier League title in 1995 with the club, dismissed all speculation with the vacancy currently occupied by caretaker manager Steve Kean.
Speaking on the BBC’s 'Match of the Day', when asked what chance there was of his taking the reins at Rovers, Shearer replied: "Save your money."
He was then asked if he was ruling himself out, replying: "I am."
The former England international had been one of the favourites to take over at Ewood Park after being out of the game for 18 months.
His last managerial position was at Newcastle United where he was unable to save the club from relegation in 2009, winning just one of his eight games in charge of the club.
He left the post in the summer of 2009 after failing to come to an agreement with Magpies' owner Mike Ashley about taking over the post permanently, and was subsequently replaced by Chris Hughton - who found himself sacked earlier this month despite winning promotion in style at the first attempt and getting off to a decent start back in the Premier League.
Shearer's decision will hardly surprise football fans across the country. Venky’s, the new owners of Blackburn Rovers, have revealed that the process of finding and appointing a successor to Allardyce could take up to three months.
Saturday’s 1-1 draw with West Ham United at Ewood Park, means Rovers are currently lying 12th in the Premier League after 18 games.
Venky’s admitted after the game to reporters that Steve Kean could remain as their manager "forever"- despite much speculation linking Martin O’Neill and Martin Jol to the hotseat.