West Ham target Manuel Pellegrini has left his position at Hebei China Fortune, the Chinese Super League club announced on Saturday.
Goal reported on Friday that West Ham had made the former Manchester City manager their top target to replace David Moyes.
"As of May 20, Mr Pellegrini will no longer work as the head coach of Hebei China Fortune Football Club,” the club announced in a statement posted to Weibo.com.
"We sincerely thank Mr Pellegrini for his contribution to the club and we wish him all the best for the future."
The move potentially paves the way for Pellegrini to join West Ham as the Premier League club search for a new manager following the 2017-18 season.
Slaven Bilic began the season at the club, but was fired mid-season as the club toiled under the threat of relegation.
While Newcastle boss Rafa Benitez and outgoing Paris Saint-Germain manager Unai Emery were in the frame for the job, Goal reported Pellegrini had become the front runner in recent days.
Emery’s lack of English was considered a detriment, as were concerns over Benitez’s wage demands and compensation for a release from his Newcastle contract.
Pellegrini has been valued thanks to his Premier League experience and success with Manchester City, where he won the league title in 2013-14 during a three-year stay.
The Chilean, who is not believed to have met with West Ham co-chairman David Sullivan yet, had a large contract in China, where he earned approximately £15.7 million per year, but it is not expected he will require a deal that large to join the London club.
The 64-year-old took over Hebei China Fortune after his departure from City. He led the side to a fourth-place finish in his only full season at the club, and departs with the team in ninth place.
In addition to the Premier League, Pellegrini won two League Cup medals during his stint at City, before making way at the Etihad Stadium for Pep Guardiola in 2016.