EPL: Why Ancelotti might not replace Wenger at Arsenal
However, the 58-year-old looks set to take the Italy job if he can agree personal terms. He will be offered £5m-a-year to transform his national side, after they missed out on the 2018 World Cup.
The UK Mirror claims Ancelotti held talks with Italy FA commissioner Roberto Fabbricini and sub-commissioner Alessandro Costacurta on Monday night and they have now made him first choice ahead of Antonio Conte and Roberto Mancini.
Arsenal will now turn their attentions to any of Mikel Arteta, Diego Simeone, Massimiliano Allegri and Leonardo Jardim.