Ancelotti leaves job at AC Milan

Carlo Ancelotti took a step closer to becoming Chelsea's new manager after he announced his contract at AC Milan has been terminated by mutual consent.

But the Italian, who guided Milan to third in Serie A, said a move to Stamford Bridge had yet to be agreed.

He said: "I have agreed to leave Milan. The decision was by mutual consent. But a move to London is not certain yet."

Milan announced technical director Leonardo will replace Ancelotti as manager for next season.

Ancelotti signed off his eight-year reign at the San Siro with a 2-0 away victory over Fiorentina, a result which secures automatic qualification for next season's Champions League group stages.

Although he refused to confirm his future with Chelsea, the 49-year-old did say he will not be joining another club in Italy.

"In agreement with the club, we have decided to bring forward the expiry of my contract," he said. "This beautiful adventure at Milan is over.

"I can't say anything else official. I have not made any agreement with any other club. I am certainly not staying in Italy."

Italian journalist Massimo Marinella told BBC Radio 5 Live he was confident Ancelotti would be confirmed as the new Chelsea boss in the next few days.

He said: "Chelsea did not want him (Ancelotti) to say anything because they did not want to spoil the press conference at Stamford Bridge.

"They want to make the announcement official in London." Milan's England midfielder David Beckham paid tribute to the departing coach.

"With Carlo Ancelotti leaving AC Milan, it is the end of an era, the end of some extraordinary years," Beckham said on the club's website. "But wherever he goes, they will be a fortunate club to have him as their coach."

Brazil star Kaka also thanked Ancelotti for the impact he has had on his own career.

The 2007 World Footballer of the Year said: "He is a person I have a very strong bond with thanks to these six years that I have spent here with him as my coach at Milan.

"I am grateful for what he has done for me and for what he has taught me.

"He gave me the opportunity to be known as a footballer across the world and I have won a lot with him. I wish him all the best in everything."

Although not explicitly naming him, Ancelotti hinted he would love to sign Kaka for whichever club he ends up at next.

"There is one player I would like to take, but I cannot take him with me," he said.

Chelsea have been searching for a replacement for Guus Hiddink, who is returning to his full-time role with Russia.

The Dutchman, who guided the west London club to victory in the FA Cup final on Saturday, was drafted in when Luis Felipe Scolari was sacked in February, but resisted the clamour to remain in charge next season.

"Guus Hiddink has done a fantastic job as temporary first team coach," read a Chelsea statement.

"Winning the FA Cup was a fitting tribute to his management and coaching skills, and a perfect send-off for him.

"He will always be welcome back at Chelsea as a friend, and in any other football capacity."

Ancelotti, who had been the longest-serving manager in Italy's top flight, having joined the Rossoneri from Juventus in 2001, has previously confirmed he has been learning English.

He previously refused to rule out the possibility of taking the reins at Stamford Bridge, despite reaffirming his commitment to the Serie A giants.

Ancelotti, speaking before the 3-2 defeat by Roma on 24 May, had said: "It's 100% certain I will still be at Milan next year."But he added: "I am open to anything. It's obvious I would say yes if you ask me if I would love to coach Chelsea."

And in his autobiography, 'Preferisco La Coppa' (I Prefer The Cup), which was released in Italy on Tuesday, Ancelotti describes two meetings he claims to have held with Blues owner Roman Abramovich last year in Geneva and Paris.

Ancelotti told the Russian about two players he thought would help turn Chelsea into the attractive, winning side Abramovich craves.

"President, your team is very physical, you have to put more quality in the middle of the pitch," Ancelotti claims to have told Abramovich.

"I gave him two names, (Bayern Munich winger) Franck Ribery and (Liverpool midfielder) Xabi Alonso."

Chelsea have refused to comment on the claims in Ancelotti's book.

Leonardo will be officially named as Milan's new coach on Monday.

The 39-year-old former Brazil international was appointed as the club's technical director in 2008.