According to The Athletic’s transfer guru David Ornstein, the 65-year-old is expected to leave Real Madrid at the end of the season after a disappointing season.
Current Bayer Leverkusen boss Xabi Alonso is the favourite to take over at the Santiago Berabeu once the club finally pull the trigger.
Ancelotti is understood to be interested in becoming head coach of the Brazil national team if he leaves his current position.
The grass isn't always greener as Real Madrid ponder Carlo Ancelotti's future
Legendary coach Sacchi has warned the Spanish giants against making a rash decision, however, urging them to stick with his old friend.
“What makes me sad, even though it’s part of football, is that everyone criticises Carletto for the elimination from the Champions League and blames him,” he said in an interview with Gazzetta dello Sport.
“Do these people have any idea who Ancelotti is? Do they know what he’s won? I consider him a true master of football, not only for his trophies, but also for his human qualities.
“Real Madrid should think twice or three times before parting ways with someone like Carletto.”