The former Tottenham Hotspur head coach was widely expected to take charge of the West Midlands outfit after reportedly agreeing personal terms.
Sherwood has insisted that he was offered the job at The Hawthorns, but opted against taking it.
He told talkSPORT: "I went to speak to the chairman and the board and I was happy with how discussions went.
"I was offered the job but in the end it wasn't right for me, so I gave it a miss. Unfortunately that's football. We couldn't agree for me to move forward.
"Discussions were going well and I was pleased with most things. It was a good opportunity for me to get back in very quickly but after prolonged discussions I decided it wasn't going to be right for me."