Carlo Ancelotti has agreed to step down as manager of Real Madrid.

Carlo Ancelotti's second term as Real Madrid manager is drawing to a close. Saturday's Copa del Rey final defeat to Barcelona all but confirmed that he would not be staying in his job until the end of the season, and that appears even more likely today.

It is no secret that Ancelotti's future has been further muddled by the Brazilian Football Federation's desire to hire him as manager of their national team. Instead, it has created a situation in which everyone gets what they want.

Ancelotti is open to taking charge of Brazil, where he would work alongside Vinicius Junior, Rodrygo Goes, and Endrick Felipe. And now, Fabrizio Romano has stated that he has secured an agreement in principle to take over the post after the La Liga season is complete.

Brazil has made it clear to Ancelotti that he must be in command from the beginning of June, which is when his contract will take effect. As a result, he will almost probably not be in command of Real Madrid during this summer's Club World Cup, which will be held in the United States from mid-June to mid-July.

Ancelotti would remain in command of Brazil until the 2026 World Cup, if the Selecao qualified for the tournament, which will also be held in North America. Given his earlier statements about wanting to retire after leaving Real Madrid, it is likely that this will be his final football position.

Real Madrid and Ancelotti are planning to finish their association on good terms. Florentino Perez has been delighted with the 65-year-old's two terms in charge, so there will be no hard feelings when the domestic season ends.

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