Sparky quit Mohamed Fayed's club a day after Gerard Houllier had stepped down as Aston Villa boss.
But Villa insist he is not in the running for their job.
A Fulham insider told The Sun: "On Wednesday evening there was a fully negotiated two-year contract with a substantial pay rise just needing to be checked over by lawyers and to be signed by Mark Hughes.
"Yet less than a day later it's all over and he's resigned.
"But if a manager can't give commitment or loyalty to the chairman then it's best they move on now and not in August with a new season looming.
"There's already been a huge amount of interest from other coaches to take over."