"It's a huge honour to be offered the position however I do not feel that this is the right opportunity for me at this moment in my career," O'Neill was quoted as saying by the BBC.
"I would like to place on record my gratitude to the SFA for the very professional manner in which they conducted negotiations and I would also like to wish them every success for the future."
O'Neill's stock has risen since taking Northern Ireland to Euro 2016, their first major tournament since 1986, but his team fell short of making it to the World Cup in Russia, losing a two-legged playoff against Switzerland in November.
(Reporting by Simon Jennings in Bengaluru, editing by Ed Osmond)
