The 55-year-old had been handed a proposal from the Italian Federation and has decided to decline the offer this week, per Fabrizio Romano.
The Spaniard wants to dedicate his time to family and to recharge following his exit from Manchester City.
Guardiola spent 10 years at City, guiding them to 20 trophies, including six Premier League titles and one UEFA Champions League title.
It's another blow for Italy as they continue the search for their next head coach, as Carlo Ancelotti looks set to stay with Brazil.
The Italian plans to continue with Brazil for the 2028 Copa America and the 2030 World Cup, and it is believed he had no intention at all to become the next Italy head coach.
Former Azzurri coaches Antonio Conte and Roberto Mancini are now reportedly being considered along with former player Andrea Pirlo.