Palermo had said recently that he would not seek a new deal with the club but hoped to finish out the year and have his squad qualify for an international tournament, reports Efe news.
The situation, however, unravelled on Saturday when Union Espa?ola tied Everton 2-2 at home, making it harder for the squad to qualify for the Copa Sudamericana, South America's club competition.
With two weeks left to play in the Chilean tournament, Union Espa?ola is sitting in eighth place, 15 points behind the leader.
The 44-year-old Palermo, a former professional football player, joined Union Espa?ola in May 2016 after coaching stints with Argentina's Godoy Cruz and Arsenal.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
