Ancelotti has been mooted as a viable option for Arsenal as the club seek a successor to long-term servant Wenger.
Wenger confirmed he will leave the club at the end of the season and the search for a new boss has already begun.
But it appears as though the Italian is not interested in the post.
Italian newspaper Corriere della Sera claim Ancelotti is instead in talks with the Italian Football Federation over becoming the Azzurri manager.
Italy failed to qualify for this summer’s World Cup and there have been calls for an overhaul of the national side as a result.
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Ancelotti is said to have spoken to FIGC officials and a second meeting is due next month.
All being well, Ancelotti will be installed as manager before Italy’s end-of-season friendly fixtures with Saudi Arabia, France and the Netherlands.
As for Arsenal, another candidate for the job - Max Allegri - could be easier to prise away from Juventus than first thought.
Express Sport understands Allegri is in high demand, with Arsenal joining Chelsea in the chase for the Italian.
Juve are aware of the interest in their manager and have taken steps to react swiftly should he depart.
Another Italian newspaper, Tuttosport, claim Juve could move for Zinedine Zidane if Allegri jumped ship.
Zidane is tipped to be axed by Real Madrid at the end of the season after a disappointing La Liga title defence - although winning the Champions League for a third year in a row may appease the Frenchman’s bosses.