The 55-year-old was sacked by the Red Devils in December following a string of poor results
Jose Mourinho has been paid £15million in compensation by Manchester United.
The Portuguese manager was sacked by the club in December having spent two-and-a-half seasons in charge.
The Daily Mail reports that Mourinho was paid the compensation package in full and this now means he is free to return to management.
The 55-year-old departed the Red Devils after their 3-1 defeat to Liverpool in the Premier League, which left them 19 points behind the leaders.
Despite being sacked less than a month ago, there are now no barriers in the way that would prevent him from taking up a new job.
Mourinho has reportedly already turned down an offer from Benfica as he wants to work for one of Europe’s leading clubs.
A source told the Daily Mail: “There are no issues over Jose’s contract with Manchester United. Everything has been sorted.
“Jose is able to take on another job right now, but is in no rush. He is very relaxed about it and would be happy to wait until the end of the season if he needs to.”
The Sun reported that Real Madrid are interested in bringing Mourinho back to the European champions.
Santiago Solari is the Spanish side’s current manager, after the departure of Julen Lopetegui earlier this season, but they are struggling in fifth place, ten points behind leaders Barcelona.
Real president Florentino Perez now wants their old manager back, six years after he left the club by mutual consent.
Contrary to reports, the source told the Daily Mail that no contact had been made by Real Madrid to Mourinho’s representatives.