Carlo Ancelotti has reached an agreement with Real Madrid concerning the terms of his departure, with the Italian now expected to become the next manager of Brazil’s national team this summer.

Ancelotti has long been linked with the Brazil role, and following Real Madrid’s early exit from the Champions League—coupled with what many consider a disappointing La Liga campaign despite the high-profile signing of Kylian Mbappé—a second departure from the Santiago Bernabéu appeared inevitable.

However, negotiations over the specifics of his exit encountered complications, primarily surrounding the matter of covering Ancelotti’s salary for the remainder of his contract, which is due to run until 2026. According to The Athletic, those issues have now been resolved.

Real Madrid are expected to formally announce the 65-year-old's departure in the coming days, although official confirmation may be delayed until after this weekend’s crucial Clásico against league leaders Barcelona. Los Blancos must secure a win in Catalonia to keep their slim title hopes alive, with Barça currently holding a four-point lead with just four matches remaining.

The Brazilian Football Confederation had imposed a 20 May deadline to appoint a new head coach, casting doubt over Ancelotti’s availability amid stalled negotiations with Madrid. However, the Italian’s verbal agreement with the Spanish giants should clear the path for him to lead Brazil in their June 2026 World Cup qualifiers against Ecuador and Paraguay. He is expected to sign a contract that will keep him in charge through to the end of the World Cup cycle next year.

With Ancelotti set to depart at the close of the season, Real Madrid must now move quickly to identify a successor, particularly with the expanded FIFA Club World Cup set to commence in mid-June. Xabi Alonso, who has just completed a historic 2023/24 season with Bayer Leverkusen, is currently the frontrunner for the role. However, the club may also consider director of football Santiago Solari as an interim option.