Ancelotti has been out of the game since getting the boot from Bayern Munich in September last year and Italian publication Corriere dello Sport claimed the former Chelsea boss had agreed a four-year contract worth £8.8million-a-season.
However, the Daily Mirror say the 58-year-old is not being considered and no deal has been offered by the Gunners.
Wenger still has one more year left to run on his existing deal after signing a two-year deal over the summer, though it is believed the club have been scoping out potential replacements for when the Frenchman does decide to call it quits.
A majority of Arsenal fans were pleased with the idea of Ancelotti taking the reigns from Wenger, whilst some still believe he is the right man for the job. One thing is for certain, the Frenchman will be in charge of the Gunners for at least one more season following the conclusion of the current one.