The former Blades player and coach held discussions with the npower League One side last week as they search for a permanent successor to Danny Wilson, who lost his job last month before caretaker Chris Morgan took charge of their unsuccessful play-off campaign.
But McCall has decided to stay with Motherwell, who he has led to third and second place in the SPL during his two full seasons in charge.
The 48-year-old, who recently signed a two-year contract, told the club's official website: "It has been a really difficult last few days. As most people probably know, I spent five great years at Sheffield United.
"I was grateful to the board for allowing me to speak to them but I went with an open mind. I had no desire to leave Motherwell after enjoying two-and-a-half great years at the club.
"There is no doubt Sheffield United are a fantastic club but, after careful consideration and deliberation, I am more than happy to continue my current role at Fir Park.
"I have built up a tremendous feeling for Motherwell, the people who work at the club and the supporters. It would take something really special to tempt me away.
"Along with the rest of the coaching staff and the board, we will continue preparations for the new season, adding new players to the squad and looking forward to a return to European football in early August."
Chief executive Leeann Dempster added: "Our admiration for Stuart and the job he has done in the two-and-a-half years at Motherwell is certainly no secret.
"However, we think it is only right never to stand in our staff's way if a big offer comes in. That is why we granted permission and respectfully remained silent during the process.
"That being said, we are absolutely delighted our manager has decided to stay with us. Stability and continuity when we are changing the squad is very desirable so it's a huge bonus to have Stuart continue in his current role."
McCall also turned down the chance to speak the likes of Blackburn and Burnley last season.
His decision is a huge boost for Motherwell as they bid to persuade Michael Higdon, James McFadden, Chris Humphrey and Tom Hateley to sign new deals.