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Published 12:20 11 Jun 2016 BST
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A medical had seemingly been set up for the forward but Vardy is said to have done "a U-turn" and will continue on as the Foxes' front man next season when Ranieri will look to build on the Premier League champions' historic 2015/16 campaign.
The claim comes from Arsenal legend Ray Parlour who spoke to Alan Brazil Sports Breakfast and explained how his sources at the club had told him about Vardy's decision.
“It looks like it isn’t happening now," Parlour said.
“I was at the Arsenal the other day and there were big reports flying around, and the club’s cameramen and digital staff had to get down to the training ground.
“So it looked like it was going to happen - there was a medical being done.
“But it seems Vardy thought about it while on England duty, and suddenly there was a U-turn.”

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