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Carlo Ancelotti has asked to leave Paris Saint-Germain for Real Madrid, PSG's sporting director Leonardo said Sunday.
Ancelotti, who has long been rumoured to be a target for Real, whose current boss Jose Mourinho is tipped to return to Chelsea next season, had a meeting with club bosses earlier on Sunday.
A subsequent report on television channel BeInSport, whose Qatari owner Nasser al-Khelaifi is also PSG president, said Ancelotti would be leaving PSG.
But Leonardo denied that, claiming the Parisians want to keep hold of the Italian.
"What happened is that Carlo has asked to leave for Real Madrid. We want to keep him, he has (another) year on his contract with us. No decision has been taken," said Leonardo.
Ancelotti has spent just 18 months at the club from the French capital and this season led them to a first Ligue 1 title since 1994.
But rumours that he is set to replace Mourinho at Real when this season finishes had been gathering pace in recent weeks.
Those were only enhanced on Sunday morning when several Spanish newspapers claimed the Portuguese boss would leave before the end of the current campaign.
Madrid sports daily Marca ran the headline "he is going to Chelsea" on Sunday morning, adding that "Real Madrid could make his goodbye official this week".
Another Spanish newspaper, broadsheet El Mundo, also reported that Mourinho may not even be in charge for Real's final two games of the season against Real Sociedad and Osasuna.
"Madrid want to sack Mourinho now," it claimed.
"The board and the president, Florentino Perez, have had enough after the defeat in the final of the Copa del Rey and the tense situation in the dressing room, and are planning to bring to an end the Portuguese's reign immediately."
With confirmation that Ancelotti has asked to be allowed to join Real, it would seem some deal has already been done behind the scenes.
Saturday night, Ancelotti had refused to comment on his future, saying only that he would meet with the club's president in the next few days.
That meeting took place on Sunday, after which BeInSport claimed a decision had indeed been made.
"Following a meeting with Nasser al-Khelaifi and Leonardo, Carlo Ancelotti will no longer be Paris Saint-Germain coach next season," said a message that ran across the bottom of the screen on the TV channel.
Ancelotti's first six months at PSG were largely disappointing as he took over a team at the top of Ligue 1, only to see them overhauled by Montpellier to miss out on the title.
However, this season he delivered on the club's twin objectives of winning the league and reaching the Champions League quarter-finals.
He was greatly aided, though, by a huge financial investment from the club that allowed PSG to sign the likes of Zlatan Ibrahimovic, Thiago Silva and Ezequiel Lavezzi, as well as bringing in David Beckham on a short-term deal in January.
Ancelotti won two Champions League titles and one Serie A crown with AC Milan while he also completed a league and cup double at Chelsea.
He has won titles in three different countries and is one of the most respected coaches in European football.