The 60-year-old, who also managed the team between 2013 and 2016 and guided them back to the Spanish top flight, has led Villarreal more than any other coach, overseeing 298 games across all competitions.
The club sit third in LaLiga with four matches remaining, a position that guarantees them elite European football next season. It's the first time in their history that they'll play Champions League football in consecutive seasons.
However, they reportedly only wanted to offer Marcelino a one-year extension, whereas he wanted to build a long-term project. As a result, they'll be parting ways.
He rejoined Villarreal in 2023, having won the Copa del Rey with Valencia in 2019 and the Spanish Super Cup with Athletic Bilbao in 2021. He has been linked with English Premier League clubs.