AC Milan vice-president Adriano Galliani has confirmed the club have entered negotiations with Cagliari to recruit coach Massimiliano Allegri.
However, Galliani has insisted the deal to bring Allegri to the San Siro is far from done.
"It's premature," said Galliani to Gazzetta dello Sport. "I cannot add anything more as coaches arrive at the beginning of July.
"We are nevertheless negotiating."
The Rossoneri have been looking for a new coach since Leonardo parted company with the club after just one season in charge of Milan's first team.
Allegri has been strongly linked with the Rossoneri hotseat in the last two months.
Cagliari surprisingly removed Allegri from his managerial duties back in April despite the club sitting comfortably in 12th place.
The Sicilian club promoted Giorgio Melis as his replacement although the 42-year-old Allegri is still contracted to Cagliari for a further year.
"At this time Allegri is the Cagliari coach, hence, we shall see," said Galliani.
"Our relationship with (Cagliari president Massimo) Cellino is great and will remain great regardless of how the negotiations go.
"Does (AC Milan owner Silvio) Berlusconi like him (Allegri)? He should answer that question but I believe he does."
Galliani denied reports that Italy coach Marcello Lippi is another candidate for the Rossonero hotseat.
Lippi is expected to leave the Azzurri squad after the World Cup in South Africa.
"There is no truth in those rumours," he said.
Allegri was voted the best coach of the 2008-09 season ahead of Inter Milan coach Jose Mourinho.
