Gary Megson is set to speak to Bolton about their vacant managerial position after parting company with Leicester.
Megson has a reputation in the game as a disciplinarian
Foxes chairman Milan Mandaric rejected two approaches from Bolton for the 48-year-old, who only took over at Leicester six weeks ago.
But in a statement on Wednesday, Mandaric said: "Gary left me no choice when he informed me he wanted to leave Leicester and talk to Bolton."
He added: "The search for a new manager begins in earnest."
Megson is expected to take charge of Bolton in time for Sunday's Premier League match against Aston Villa.
Assistant boss Frank Burrows and Gerry Taggart have been put in temporary control at Leicester, who are now looking for their fourth manager of 2007.
In an emotional statement, Mandaric continued: "I made it abundantly clear that Bolton's interest was neither welcome or invited but it was evident to me following a meeting requested by Gary that his loyalties and heart lay elsewhere.
"Naturally I am very disappointed.
"My objectives were to stand firm in the face of mounting interest from Bolton and intense media speculation over Gary's future, but in the end these completely undermined my firm determination to retain his services.
"In point of fact it was abundantly clear to me that if I stood in Gary's way it would have a detrimental effect on the club and I was not prepared to allow that to happen."
Mandaric added that he had agreed a compensation package with Bolton - thought to be about £300,000.
Megson's last match in charge of Leicester was Tuesday's 1-0 defeat to Sheffield United during which he was the target of some fans' anger.
"The crowd's reaction to me towards the end wasn't particularly palatable from my point of view," Megson said.
Mandaric revealed that it was after the game that Megson requested a meeting with the Foxes chairman about his future.
Bolton have been looking for a new manager since parting company with Sammy Lee on 17 October.
Paul Jewell, Graeme Souness and Chris Coleman were all linked with the post before Megson emerged as the surprise favourite.
Before being appointed by Leicester on 13 September, Megson had been out of work since leaving Nottingham Forest 18 months earlier.
Before his spell at the City Ground, Megson had also managed Norwich, Blackpool, Stockport and Stoke before a four-year reign at West Brom.
Leicester won only three of Megson's nine games in charge, and only one of those victories came in the Championship - a 2-0 win at Sheffield Wednesday.