The deal means he is free to join another club, with Real president Florentino Perez keen to bring the Portuguese back to the Bernabeu.
He reigned at Old Trafford for just two and a half years and won an Europa League and EFL Cup titles for the club. His contract was calculated until July 2020.
There are no longer any ties to Manchester, and it looks as though Jose already has his eyes on his next move.
Mourinho told Correio de Manha: "I have no intention of working in Portugal. At the moment, I'm fine as I am", Mourinho added.
Now out of work, Mourinho has been quite highly sought-after, with as many as four clubs making an offer to him, most prominently being Benfica.
Coach Rui Vitoria left Benfica last Thursday after an agreement with the club.
Mourinho is already said to have turned down a managerial role at Portuguese giants Benfica, while former club Real Madrid are thought to be interested.
Mourinho began his coaching career in 2000 at Benfica but was in charge for only nine games before spells at Porto, Chelsea, Real Madrid and Inter Milan.
"When you leave a club, you do not wash dirty clothes, you do not seek to, at least publicly, do any kind of criticism, it's an ended chapter and that's how I always did it".
And according to Portuguese sports daily A Bola, the Benfica chief is serious about wooing Mourinho and is scheduled to hold a one-on-one meeting with the former two-time Champions League winning manager.