In what has been a dramatic 48 hours at The Hawthorns, the Express & Star confirmed on Tuesday Albion's board made Chris Wilder their number one managerial target.
But a move for the former Sheffield United boss was vetoed by owner Guochuan Lai.
With Wilder out of the running, the Baggies hierarchy interviewed a number of candidates - with Wagner coming out on top.
Talks with the 49-year-old, who guided Huddersfield into the Premier League back in 2017, then reached an advanced stage with it looking highly he would be the next Baggies boss.
But that move has now collapsed.
It is believed one reason the deal has broken down is Wagner wanted to be closer to his family who are based in Germany.