Reports in Italy had claimed that City were lining up a £30million bid for the 20-year-old Italy international.
However, El Shaarawy insists that he cannot see himself leaving Milan this summer - even though he is 'flattered' at City's reported interest.
"I don't think I will leave Milan," he told La Repubblica
"If City really wants me, it flatters me. But I want to stay here at AC Milan.
"I always felt total confidence from all: the club, coach [Massimiliano] Allegri and team-mates.
"It's also thanks to them that I am in the Italian national team."
Source: Manchester City MAD