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Melbourne Victory are searching for yet another coach after Jim Magilton walked out on learning the club had placed him on a short-list.

Melbourne Victory are searching for a fourth coach in the space of little more than a year after interim boss Jim Magilton walked out, having learned he had only been short-listed for the permanent position.

Despite leading the Victory to only two victories in his 12 A-League matches in charge since replacing the sacked Mehmet Durakovic midway through the season, Magilton had made it clear he wanted a longer-term contract.

He sought legal advice last week upon learning that was not necessarily going to be forthcoming.

Victory managing director Richard Wilson said on Sunday that when Magilton was told he was just one of several candidates on a short-list, he refused to partake in the selection process.

After being a byword for stability during their first six years in the A-League, which included two championships, the Victory have churned through coaches at an astonishing rate in the last year.

Foundation coach Ernie Merrick was dumped at the end of the 2010-11 campaign and replaced by Durakovic, who was sacked after serving six months of his two-year contract.

The Victory showed few signs of improvement under Magilton, finishing well out of the finals race in eighth spot.

"Jim arrived at the shortest of notice, on a leap of faith, stepping into a role that he had limited background on," Wilson said in a statement.

"We realise that we didn't ultimately reach the finals this season, which was our goal, but we also believe Jim was unlucky not to have finished with a better record, given we conceded goals in the dying stages of games against Sydney and Gold Coast.

"He was a total professional throughout the three months he was here.

"His preparation week-to-week was exceptional, his team selection saw the integration of several youngsters and was always in the best interests of the club.

"He also re-shaped a number of processes in the football department with the support of his assistant Chris O'Loughlin, who he brought with him, which will hold us in very good stead as we take our next steps forward."

O'Loughlin has also left the club.

Magilton, 42, spent 18 years as a player with a number of English clubs including Southampton and Ipswich.

The Northern Irishman began his managerial career at Ipswich in 2006 and also had a controversial short stint in charge at Queens Park Rangers.

He said both he and O'Loughlin had enjoyed their time in Melbourne.

"On behalf of Chris and myself, I'd like to thank everyone at Melbourne Victory for the opportunity that was presented to us," Magilton said in a statement.

"We have thoroughly enjoyed the experience and wish the club every success in the future."