The transition team released a statement Friday saying Giuliani removed himself from consideration for a position last month, a description contradicted by CNN reporting that the New Yorker was told he would not get the secretary of state position this week.
"Rudy Giuliani is an extraordinarily talented and patriotic American. I will always be appreciative of his 24/7 dedication to our campaign after I won the primaries and for his extremely wise counsel," Trump said in the statement. "He is and continues to be a close personal friend, and as appropriate, I will call upon him for advice and can see an important place for him in the administration at a later date."
Giuliani was being considered as Trump's possible pick for secretary of state -- one of the most important positions in a president's cabinet. During Trump's campaign, Giuliani worked as a top surrogate and adviser to the real estate mogul during his campaign.
That Giuliani will now not serve in Trump's administration is the latest sign of a longtime loyalist being shut out and replaced with other conservatives .
Trump loyalists -- both high profile surrogates like Giuliani and campaign staffers -- who have supported his campaign from the early days are expressing frustration that they are being shut out, complaining that they haven't been given assurances about administration jobs.
Another Trump loyalist Chris Christie met with Trump Wednesday, where the New Jersey governor said, "he just doesn't want to be part of the public speculation show anymore," a source familiar with Christie told CNN's Gloria Borger, and added, "he is still Trump's friend and will be happy to remain an informal adviser."
Giuliani will stay on as a "Vice Chairman of the Presidential Transition Team," the organization said.
He told Fox News after the news of decision broke said Trump "continues to be one of my closest friends," and that they're going to the Army-Navy football game together on Saturday.
And for the position of secretary of State, Trump is seriously considering 2012 Republican presidential nominee Mitt Romney -- who strongly warned voters against Trump earlier this year -- for the role.
Romney and Trump grabbed dinner last week with Priebus, Trump's incoming White House chief of staff and chairman of the Republican Party.
"I thought Mitt went over the line" with the things he said about Trump during the campaign, Giuliani said last week on Fox News.
Trump's former campaign manager Kellyanne Conway, Mike Huckabee and Newt Gingrich, three longtime Trump supporters, have publicly complained about Romney as a candidate for leading the State Department.
Specifically, Conway told CNN's Dana Bash on "State of the Union" that Trump's loyal supporters across the country feel "betrayed" that he is considering Romney, who was one of his most vicious critics during the election.
Trump has hired Priebus and former campaign executive Steve Bannon as "equal partners" -- with the former Breitbart chief as a senior adviser. While Bannon is seen as a pick for the grassroots conservative activists, Priebus epitomizes the Republican establishment that many of them railed against. A close friend of House Speaker Paul Ryan, the Wisconsin operative has guided Trump toward hiring proven Republicans for his administration, worrying the early Trump backers that they -- and their agenda -- will be left out of the mix.