The Denver Post reported Wednesday that Jones had accepted Colorado's offer. However, Jones said that report was "false" in a text to ESPN.
Jones is now being considered for the opening at Tennessee and spoke to Volunteers officials Thursday, according to a source.
Jones had a five-year, $13.5 million offer from Colorado, the Post reported. On Monday, Jones interviewed with Colorado after earlier interviewing at Purdue. On Tuesday and Wednesday, Jones participated in bowl news conferences, promoting the Bearcats' Belk Bowl berth, in Cincinnati and Charlotte.
Jones, who has been at Cincinnati for three seasons, had been weighing his options since meeting with athletic director Mike Bohn and other Colorado officials on Monday.
Jones was Colorado's top choice to replace Jon Embree, who was fired last week after going 4-21 in two seasons.
The 44-year-old Jones is 50-27 as a head coach, including 23-14 in three seasons at Cincinnati. The Bearcats (9-3) will play Duke (6-6) in the Belk Bowl on Dec. 27, in Charlotte, N.C.
The next coach to take the reins for the Buffaloes will be inheriting a squad that went 1-11 this season, the worst mark in the 123-year history of the program. The Buffs were 1-8 in the Pac-12.
Embree had three years remaining on the five-year contract he signed on Dec. 6, 2010, when he replaced Dan Hawkins, whose poor recruiting classes and string of losing seasons led to his dismissal.
Information from ESPN.com's Joe Schad, Chris Low, Andrea Adelson and The Associated Press was used in this report.