Newcastle's director of football Joe Kinnear wanted the former England striker as his assistant.
But Harford, who spent a short time at St James' Park as a player in the early 1980s and worked with Kinnear at Wimbledon, has declined the offer.
The 54-year-old last month joined the coaching staff at Millwall, and he told Sky Sports News: "After meeting with Mike Ashley and Joe Kinnear, I made the hard decision that it is not the right time for me to take up this role.
"It was an honour to be asked to work at a fantastic club and I have the utmost respect for the Newcastle United and its fans.
"I am currently enjoying a role helping out at Millwall, but would like to thank Mike Ashley and Joe Kinnear for the opportunity."
Source: Newcastle United Mad