Clarke, who has been a prominent Trump surrogate since the early days of his presidential campaign, met with President Trump in Wisconsin on Tuesday to discuss other potential roles he could fill, the Post reported.
Clarke had announced last month that he had accepted an offer within the agency, but the agency never publicly announced the position, according to WisPolitics.
Clarke announced in a radio interview in May that he was taking the job.
Since election day Clarke's name has been floated for a number of possible positions, including Federal Bureau of Investigation director after James Comey was sacked.
Sheriff Clarke, who once claimed that the Islamic State and Black Lives Matter activists were forming an alliance to destroy America, notified John F. Kelly, the homeland security secretary, of his decision on Friday, according to an adviser.
Clarke is known for his vocal support of President Donald Trump.
Clarke was expected to start in his new role at DHS at the end of June.The Post reports, however, that one person close to the administration says Clarke's appointment had been subject to significant delays that contributed to him rescinding accepting the new position.
"The sheriff is reviewing options inside and outside of government", Peterson told the Post.
Clarke has also been criticized for his track record as Milwaukee County Sheriff.
He was hit by allegations last month that he plagiarized content in his master's thesis on homeland security, which he denied.
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