During a 19-year career that also included coaching the New York Giants, New England Patriots and New York Jets, Parcells made it to three Super Bowls winning twice with the Giants.
In his last try, the Cowboys blew a chance to beat the Seahawks when Pro Bowl quarterback Tony Romo botched a hold on a short field goal with a little more than a minute left.
Parcells goes out having losing lost four of his final five games, including the last three. His announcement came 15 days after the loss to Seattle.
"I am retiring from coaching football," Parcells said in a statement. "I want to thank Jerry Jones and Stephen Jones for their tremendous support over the last four years. Also, the players, my coaching staff and others in the support group who have done so much to help. Dallas is a great city and the Cowboys are an integral part of it. I am hopeful that they are able to go forward from here."
The announcement came in a morning e-mail. There was no statement from Jones, the team owner, although one was planned for later in the day. There were no immediate plans for a news conference.
"I am in good health and feel lucky to have been able to coach in the NFL for an extended period of time," Parcells said. "I leave the game and the NFL with nothing but good feelings and gratitude to all the players, coaches and other people that have assisted me in that regard."
Known best for a gruff demeanor and colorful quotes, Parcells leaves with the ninth most wins in NFL history and a career record of 183-138-1. He was 34-32 in Dallas, including 0-2 in the postseason. He had one year left at more than $5 million on a contract extension signed last January.
Before joining the Cowboys, Parcells led the Giants to Super Bowl wins after the 1986 and '90 seasons, got the Patriots to a Super Bowl and took the Jets to the AFC title game.
He gave up a job in television to return to the sideline in Dallas, energized by the challenge of restoring glory to "America's Team."
While he definitely left the Cowboys better than he found them, his tenure ultimately may be remembered for the lack of a playoff victory. Dallas hasn't won a postseason game since 1996, easily the longest skid in the history of the franchise that's been to a record eight Super Bowls.
Thus, Parcells' legacy with the Cowboys can be framed this way: Instead of joining Tom Landry, Jimmy Johnson and Barry Switzer as coaches who led them to championships, he leaves lumped with Chan Gailey and Dave Campo as the only ones who didn't.
"I did the best I could," Parcells said following the 21-20 playoff loss in Seattle. "But it wasn't quite good enough."
This past season, Parcells also had to endure the constant dramas that came with coaching Terrell Owens. With Parcells gone, there may be a better chance that Owens returns in 2007.
Before Jerry Jones starts thinking about that, he'll have to find the seventh coach in team history.
If Jones wants a proven commodity, he might go after Tennessee's Jeff Fisher or Bill Cowher, recently resigned from Pittsburgh. Both are under contract for 2007, which means their teams would get compensation in addition to the massive salaries they'd command.
If Jones looks for an NFL assistant, he could go for unproven but highly sought Ron Rivera, defensive coordinator in Chicago; or for former head coaches like San Diego defensive coordinator Wade Phillips or San Francisco offensive coordinator Norv Turner. Turner would be a popular choice locally; he called plays for Dallas' Super Bowl team in 1992 and remains close to Troy Aikman.
If Jones goes after a college coach, big-name candidates would be Charlie Weis of Notre Dame, a former Parcells assistant, and Southern California's Pete Carroll, who coincidentally replaced Parcells in New England in 1997. Bob Stoops of Oklahoma and Houston Nutt of Arkansas, Jones' alma mater, also might be considered.
There do not seem to be any strong internal candidates. The closest Parcells came to grooming a successor was Sean Payton, who was hired last year to coach New Orleans and became the NFL coach of the year.
All candidates will have to accept Jones being the general manager. That might have driven away others before, but four years of avoiding ego clashes with Parcells probably has changed his reputation.
Parcells' specialty in football was defense. His greatest trait as a coach, though, was his ability to turn around downtrodden clubs. All four teams he coached had losing records before he arrived, but all four were in the playoffs by his second season. No other coach has taken that many franchises to the postseason.
The Cowboys went from three straight five-win seasons before Parcells arrived to 10-6 and into the playoffs in his first season, 2003. That same year, Jones persuaded Arlington voters to accept a tax hike to pay $325 million toward a new stadium. It's unlikely to have passed without the enthusiasm generated that fall by Parcells' arrival and the team's surprising success.
Dallas stumbled in '04, then nearly made the playoffs in '05. This past season began with high hopes that were lowered when Parcells turned to Romo in late October. Expectations were soaring again after he started 5-1, but the end was rough.
Bad finishes proved to be a Parcells trademark in Dallas. His teams closed each of his four seasons with 2-3 finishes; in 15 years with the Giants, Patriots and Jets, he had a losing record over the last five games only twice.
Despite his fiery side, Parcells was never fired from an NFL coaching job. He left the Giants because of health issues, walked out on the Patriots because of squabbles with ownership and decided to leave the Jets, spending a year in the front office after giving up coaching.
He was working for ESPN when Jones came calling. Parcells had turned down other jobs, but was lured by the Cowboys' mystique.
"There are acts in the lounge and then there are acts in the big room, where Elvis and the big names played," Parcells told Fortune magazine in 2003. "The Dallas Cowboys are the big room, and I view this as an opportunity to play it."
He remained on stage for four years — but never delivered the big finish fans were counting on.