It has been reported that general manager Adriano Galliani was negotiating the sale of their Brazilian superstar during a visit to Spain.
Speculation has been mounting that Kaka will swap the San Siro for the Bernabeu following Florentino Perez's return as Real president.
Goodbye?: Kaka is set to leave AC Milan this summer
Reports last night claimed a deal had been agreed between the clubs during talks in the Spanish capital. But in a statement released by the Italians, Milan insisted Galliani had only travelled to Madrid to attend a dinner for Perez.
'The general manager of the Rossoneri, Adriano Galliani, is in the city of Madrid exclusively for the investiture dinner of Florentino Perez, the new president of Real Madrid,' the statement read.
Denial: Milan say Kaka is staying
Yesterday Kaka, who turned down a move to Manchester City in January, claimed he wants to stay at the San Siro.
'I'll say it for the last time. The last time. I don't want to leave Milan," he told Gazzetta dello Sport.
'In this period I prefer to remain silent because I don't want to be misunderstood. Or, worse still, to be used. To the millions of Milan supporters, I say that I have made my choice. I have said what I want to stay. Leave me in peace, please.'
Kaka was the subject of a big-money bid from City in January but the audacious swoop failed, with the player insisting he had no desire to leave Milan.
Since then he has been linked with a move to Madrid and speculation increased still further as the return of Perez - who was in charge during the Spanish club's famous Galacticos era - grew ever more likely.
Chelsea and Manchester United have both also shown interest but the forward is likely to head to Spain this summer.
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