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Carlo Ancelotti says he is staying at Milan after Chelsea confirmed no one has been approached regarding the vacant manager's position.
Sky Sports News understands that the Premier League club had agreed terms with Ancelotti's advisors over a deal to replace Avram Grant at Stamford Bridge.
But, speaking to reporters outside Milan's club headquarters, Ancelotti confirmed he is not planning to leave the San Siro.
"There haven't been any contacts with Roman Abramovich's club," Ancelotti told the Italian media
"These rumours are the usual speculations that are repeated each year.
"I stay at Milan 150%"
Chelsea have also now confirmed that they are yet to make an approach to an individual, or another club, but are happy with the progress being made in the quest to appoint Grant's successor.
A club statement read: "Contrary to reports Chelsea Football Club has not reached agreement with any individual to become manager, nor have we sought permission from any organisation to talk to their manager.
"We are extremely happy with how our search is progressing."
A clutch of names have been linked with the Chelsea job since Grant was dismissed last month after failing to win a trophy during his eight months in charge.
Blackburn Rovers manager Mark Hughes, who is in talks with Manchester City, has been mooted as a leading candidate for the role.
Former Internazionale coach Roberto Mancini, who has been succeeded at Giuseppe Meazza by ex-Blues boss Jose Mourinho, is another name in the frame.
Guus Hiddink, Frank Rijkaard, Luiz Felipe Scolari, Didier Deschamps and Sven Goran Eriksson are other managers to have been linked with the position.
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Frank Lampard refused to be drawn on his future after his predatory brace helped Chelsea win 2-1 at Everton.
Rafael Benitez insisted he knew nothing of reports suggesting Demba Ba was set for talks with Chelsea officials.
Chelsea interim boss Rafael Benitez would not comment on the future of Frank Lampard after the win over Everton.