Kolb remained on the Arizona roster at a 4 p.m. EDT deadline Friday, ensuring him a $7 million roster bonus that the team would not have paid if they had landed Manning.
Coach Ken Whisenhunt issued a statement acknowledging that "acquiring Peyton Manning is no longer an option for us."
Also on Friday, the Cardinals agreed to terms on a five-year contract for offensive tackle Levi Brown, who had been released by Arizona on Tuesday in a salary cap move.
The Cardinals were an early entry in the Manning sweepstakes. The four-time MVP, released by the Indianapolis Colts after missing last season following a series of neck surgeries, had dinner at Whisenhunt's house last Saturday night, then spent nearly 6½ hours at the Cardinals' facility on Sunday.
But as the week wore on, the Cardinals' hopes faded as the Tennessee Titans joined the Denver Broncos as contenders. In what had to be sour news for the Cardinals, NFC West rival San Francisco became a late entry in the Manning competition.
Manning worked out for the Broncos Friday, and threw passes and underwent a physical exam earlier this week for the 49ers, league sources told ESPN senior NFL analyst Chris Mortensen and ESPN NFL Insider Adam Schefter.
The Cardinals were informed they would be wise to proceed without Manning as a candidate to join the team and, as a result, opted to stick with Kolb.
Manning first visited the Broncos March 9, followed by a visit to the Cardinals, but there were other unreported developments last weekend, such as the Seahawks parking a jet at an airport in the Denver area in a failed attempt to visit with the quarterback, sources told Mortensen and Schefter.
Whisenhunt said that pursuing Manning was an opportunity the team had to attempt.
"Obviously something very unique and unexpected presented itself," he said. "We've said many times: If there is an opportunity to make our team better, we view the potential of adding a first-ballot Hall of Famer quarterback as one of those."
He said the Cardinals "quickly put together an aggressive plan to go after it."
"We're proud of that and feel very strongly about what we have to offer as a team and as an organization," Whisenhunt said. "In the end it didn't work out but from our perspective it was very positive and we certainly don't have any regrets about it."
With the team dealing with salary cap issues, the deadline for Kolb would have served as the final blow to Arizona's chances, which in reality had evaporated anyway as Manning turned his attention elsewhere.
"We sit here today in the same spot we were heading into the offseason," Whisenhunt said. "That's with two experienced quarterbacks who have both demonstrated positive things in the past and who we feel good about. Like we said at the end of the season when we won seven of the last nine games, carrying the momentum of that strong finish into 2012 is important and that remains unchanged."
The comments indicate that Kolb will not simply be handed the starting job but will have to compete with John Skelton when training camp opens late this summer. That is something Kolb acknowledged at the end of the season that he knew he would have to do.
The Cardinals have a significant investment in Kolb, who was acquired from Philadelphia before last season in exchange for cornerback Dominique Rodgers-Cromartie and a second-round draft pick.
Arizona signed Kolb to a five-year, $63 million contract, with $21 million guaranteed. But with no offseason because of the lockout, he had trouble picking up Whisenhunt's offense. With quarterback inconsistency and a host of other problems, Arizona got off to a 1-6 start, then Kolb was sidelined with a turf toe injury.
Thanks largely to a rapidly improving defense, the Cardinals finished 7-2. Skelton, in his second season out of Fordham, was 5-2 as a starter, 6-2 if you count the win over San Francisco, when Kolb was sidelined for the remainder of the season with a concussion. Kolb did, however, have a good game in Arizona's win over Dallas after he finally came back from the turf toe problem.
Brown, the fifth overall draft pick out of Penn State in 2007, was cut loose because he would count nearly $17 million on this year's salary cap.
He has been a starter since his rookie season, moving from right to left tackle in 2010. While he has struggled at times, he was praised by Whisenhunt for improvement.
Brown is the second offensive lineman to agree to terms with the Cardinals this week. Free agent guard-tackle Adam Snyder did so on Wednesday.
Information from ESPN senior NFL analyst Chris Mortensen, ESPN NFL Insider Adam Schefter and The Associated Press was used in this report.