Fabio Capello's resignation from England manger has been accepted by executives from the FA, hours after Redknapp, the bookmakers favorite to replace him, was cleared of tax evasion in a trial in London.
The Italian took the decision after the governing body removed John Terry as team captain without consulting him.
"I acted the way I always have in football," said Capello today. "I cannot permit interference from the FA in my work. I have always been clear who should manage the team and the dressing room, and who has to take decisions."
The Italian also issued a statement thanking the FA for their approach to him before the Terry confrontation.
"I would like to thank all players, staff and Football Association for the professionalism they have shown during my years as manager of the English National Team," Capello said in a short statement.
"A very special thanks to all the supporters: they've always supported the team and me in our job. I wish all of them every success in achieving all their sporting goals."
Since Capello's departure, the FA has confirmed that U21 manager Stuart Pearce will take charge of England for the friendly against Holland on February 29 while the board looks for a permanent replacement.
Bernstein told a press conference at Wembley: "I can announce that Stuart Pearce will manage the England team against Holland.
"I have got great confidence in Stuart, we will be in good hands.
"Our priority then will be to appoint a new England manager."
Harry Redknapp was acquitted of tax evasion charges just before Capello's resignation. Redknapp might have got up yesterday wondering if he was going to jail. He went to bed wondering if he was going to be the England manager as almost every one wants him to take over the post.
The Manchester United defender Rio Ferdinand wrote on Twitter: "I think we need an English manager now, we don't need anything else lost in translation. Harry Redknapp would be my choice by a distance."
Wayne Rooney wrote on Twitter following the announcement: "Gutted capello has quit. Good guy and top coach. Got to be English to replace him. Harry redknapp for me."
The former England goalkeeper Peter Shilton also agreed, telling Sky: "I think it's maybe Harry's time. He plays the game the right way."
Harry Redknapp today said he has "not even thought about" becoming the next England manager.
Redknapp spoke as he left his home near Poole today, and played down talk of him stepping in to guide the team at Euro 2012.
He said on Sky News: "I've not even thought about it. I've got a job to do.
"I've got a big game on Saturday for Tottenham. Tottenham is my focus."
Tottenham face Newcastle at the weekend, and Redknapp insists all his attention is on that fixture.
Asked whether he could help out England this summer, Redknapp said: "I've never thought about it.
"They (the Football Association) will make whatever decision they want to make.
"Hopefully it'll be the right decision for the country but my focus is all on Tottenham."