Le Graet's dismissal of Zidane as a potential successor to Deschamps comes two years after he had backed the former midfielder to take up the reins if he was available.
Zidane’s departure comes at the end of a disappointing campaign for the 13-time European champions.
Spanish media are reporting that Real Madrid coach Zinedine Zidane informed the players about his exit at the end of the season.
Real Madrid coach Zinedine Zidane expressed his annoyance with his side's growing injury problems after a setback to defender Dani Carvajal in their 2-0 win over Valencia left him with eight stricken players at a crucial stage of the season.
Real Madrid were without coach Zinedine Zidane, who continued his recovery from Covid-19, while injured captain Sergio Ramos sat in the stands wearing a mask but could still be heard yelling at his team mates and the referee.
Eden Hazard ended Real Madrid's drought in a match that coach Zinedine Zidane missed after he contracted the coronavirus.
Meanwhile, Lionel Messi and Antoine Griezmann each scored twice as Barcelona thrashed Granada 4-0 away to win a third consecutive La Liga game for the first time this season.
Real Madrid's second consecutive defeat comes ahead of Saturday's Clasico and at the hands of Ukrainian champions Shakhtar, who were without 10 first-team players and nine members of staff due to coronavirus infections.
Real Madrid have been crowned La Liga champions for the 34th time after Karim Benzema scored twice in a 2-1 victory over Villarreal which clinched the title with one game to spare.
Substitute Ivan Rakitic scores in the 71st minute to help Barcelona win 1-0 against Athletic Bilbao bringing the Catalans back to the top of the La Liga. Second placed Real Madrid face Real Mallorca on Wednesday.
Real's victory means they lead the standings on 56 points after 26 games, with Barca slipping to second spot on 55.
Gabriel Jesus scored an equaliser in the 78th minute and Kevin De Bruyne netter an 83rd-minute winner from the penalty spot as Man City came from behind for a 2-1 win over Madrid in the first leg of the last 16 at the Bernabeu Stadium on Wednesday.
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