According to the Bayhawks, who gave Larranaga a one-year contract extension on Sunday, Larranaga was offered a six-figure salary to work for his dad.
"Having the opportunity to coach at the highest level of college basketball and alongside my father would have been a special opportunity, and this was a very difficult decision," Larranaga, who was in Miami watching the Heat play the Boston Celtics in Game 1 of the Eastern Conference semifinals Sunday, said in a statement released by the Bayhawks on Sunday.
"But after careful consideration with my family, I decided that Erie provides me a great opportunity to continue to develop and grow with this franchise."
D-League head coaches typically make mid-to-high five-figure salaries per year, but have been known to receive six-figure salaries. The Bayhawks announced Larranaga had received a raise, but did not reveal his new salary.
Larranaga, 36, finished third in voting for NBDL Coach of the Year this past season.