Leicester have appointed Rob Kelly as manager for the rest of the season, with goalkeeping coach Mike Stowell as his assistant.
Kelly, 41, has steered the Foxes to three successive wins in the Coca-Cola Championship following the sacking of Craig Levein last month, lifting the club six points above the relegation zone.
Luton boss Mike Newell and Brentford counterpart Martin Allen earlier ruled themselves out of a move to the Walkers Stadium, with Kelly now handed the task of trying to preserve their Championship status.
He said: 'I am flattered but I will quickly get over those selfish thoughts. I am delighted to have been given the opportunity, particularly at a club like this, but you quickly get past that.
'The decision now allows everyone to settle down and focus on what is really important and that is the next 13 games.'