Manchester United paid up Jose Mourinho’s £15 million compensation package immediately after he was sacked.
The 55-year-old was dismissed on December 18 after two and a half seasons in charge.
The fact that he received the pay-off on his departure from Old Trafford means he is free to return to management.
A source close to Mourinho revealed on Wednesday night: ‘There are no issues over Jose’s contract with Manchester United. Everything has been sorted.
“Jose is able to take on another job right now, but is in no rush. He is very relaxed about it and would be happy to wait until the end of the season if he needs to.”
The improved contract United agreed with Mourinho a year ago was due to run until the end of the 2019-20 season, with an option of a further season.
Real Madrid, who the Portuguese coached from 2010-2013, have been heavily linked with a move to bring Mourinho back to the Bernabeu.
President Florentino Perez remains a huge fan and the Champions League holders have struggled this season.
Their 2-0 home defeat by Real Sociedad on Sunday saw them slump to fifth in La Liga, 10 points behind leaders Barcelona.
Manager Santiago Solari is under huge pressure having replaced Julen Lopetegui in the Spanish capital at the end of October.
The source added: “There has been no contact, but they did get in touch with Jose after Lopetegui was dismissed, but he told them he was the manager of Manchester United and totally committed to the club
Mourinho has also been spoken of as a possible successor to the axed Rui Vitoria at Benfica.
Club president Luis Filipe Vieira has gone on record to say money will not get in the way if Mourinho wants to return to management in his homeland. But it is understood that Mourinho has no imminent plans to return to Portugal.
‘While Mourinho considers his future he has lined up some work as an analyst for beIN Sports in Qatar for the Asian Cup this month.