With over 300 appearances for Roma and earning managerial experience as assistant to Fabio Capello with Russia it seemed the Italian was well-placed to help the Amaranto back to Serie A when taking over in March 2015, but was sacked last November.
Replaced by former Napoli coach Bortolo Mutti, it is the 61-year-old who finds himself out of work with Livorno languishing in 18th in the second-tier, hastening the return of Panucci as confirmed by their official website.
In his last spell at the Stadio Armando Picchi the former right-back finished the 2014/15 campaign unbeaten in their last nine matches, but too many draws and a bad head-to-head record with eighth-placed Avellino meant they missed out on the play-offs.
Now Panucci has the chance to impress once more and end a 12-match winless run for the Labronici when they take on Brescia this weekend.