Carlo Ancelotti is reportedly close to terminating his contract with Everton and seems set for a sensational return to Real Madrid.

Sky Sport Italia reporter Fabrizio Romano claims the Italian coach and the Toffees are negotiating the former Napoli coach’s farewell.

Marca reported Ancelotti was the main target to replace Zinedine Zidane at the Santiago Bernabeu and the 61-year-old is close to reaching an agreement to free himself from his current club.

Ancelotti left Los Blancos in May 2015 and seems set to return after six years and further experiences with Bayern Munich and the Partenopei.

Ancelotti won the Champions Legaue, the Copa del Rey and the FIFA Club World Cup during his last stint with the Merengues.

Romano reports the termination of his deal with Everton is the last step before Real Madrid can announce the return of the Italian tactician, which could come as early as today.