At a news conference at Wrigley Field, Hendry said Quade, Sandberg and new Mariners manager Eric Wedge were the three finalists.
"A great many people would love to be the manager of the Chicago Cubs," Hendry said. "Ryno was a very good candidate. He's a terrific guy and we all know that. He's been a great Cub on and off the field. He was certainly in the final group for consideration."
Sandberg, coming off his fourth season as a Minor League manager in the Cubs' organization, was not immediately offered a job on Quade's staff and said he was "digesting" the news and deciding what to do next. Several teams still have managerial openings.
"I spent the four years in the Minor Leagues to manage at the Major League level," Sandberg said. "I think that's where my heart is and that's where my next step is. I think that's where I look at next. I'll take it a step at a time and look at my next opportunity and go from there."
He called his time in the Cubs' Minor League system a "positive opportunity." Sandberg began with two seasons at Class A Peoria, then another at Double-A Tennessee before moving up to Triple-A Iowa. He was named Pacific Coast League manager of the year this season after an 82-62 record.
The Hall of Fame second baseman met twice with Hendry, once with assistant general manager Randy Bush, and also with Cubs chairman Tom Ricketts and president Crane Kenney.
"All I can say from my standpoint is, I was well prepared, I felt very good about it," Sandberg said of the process. "Managing four years in the Minor Leagues went a long way with my presentation and what I knew about the organization and the young players and about teaching and having a game plan and philosophy and something I wanted to instill in the Cubs. Those four years went a long way in that process for me. I don't look back at anything. I felt I made the most of my opportunity and had success and there's no looking back."
So, no regrets?
"Reflecting back, there's no regrets," Sandberg said. "I wish Mike Quade the best and the Cubs the best and the Ricketts family."
Sandberg, 51, would have been the first Hall of Famer to manage since Frank Robinson, who did so for 16 seasons, most recently in 2006 with the Washington Nationals. A 10-time National League All-Star and nine-time Gold Glove winner, Sandberg compiled a career .285 batting average, hit 282 homers, totaled 1,061 RBIs, and won NL Most Valuable Player honors in 1984.
Yankees manager Joe Girardi's name also had been mentioned as a possibility for the Cubs. Hendry said he didn't feel the need to wait for Girardi to finish the playoffs.
"To be honest with you, our time frame was what it was," Hendry said. "Joe Girardi is an outstanding manager and we have a history with Joe, who played here years ago when I first got here. Joe has a job, a terrific job, as high a profile as there is with a great team. But at the end of the day, Mike Quade is our guy.
"[The decision] had nothing to do with the time frame or who might be available and who wasn't," Hendry said. "The bottom line was we felt Mike was the best fit for us and the organization moving forward."
When Lou Piniella decided to retire early in August, the Cubs promoted Quade from third base coach and he led the team to a 24-13 record, second-best in the Major Leagues in that stretch.
"I've always felt like I could do this job but somebody has to give you the opportunity," Quade said Tuesday. "Maybe you get the break that I got with six weeks to go to get the opportunity to not just say you can do this but show you can do this. For me, Mike Quade, that makes a world of difference."
Sandberg will have to wait for his chance.