Scolari has been out of work since parting company with Chelsea in February after a brief spell at Stamford Bridge.
With Gremio coach Celso Roth resigning at the weekend, the Brazilian club are said to have approached the former Blues boss as an experienced replacement at the helm.
Gremio director of football Andre Krieger, though, says Scolari will not be returning to Porto Alegre.
No chance"There isn't any chance at all," he said. "I want to make this very clear because I don't want to create false expectations.
"There isn't any chance in having Scolari at Gremio, most of all because he wants to stay in England.
"We haven't decided yet who will be the new coach.
"Now we have to focus on the match that we have to play against Aurora in the Copa Libertadores.
"After that we will keep on analysing who can be the coach."