Ancelotti chose to sell Ozil over Di Maria
The German international joined the Gunners for £42.5 million ($68.9 million), just a day after Madrid had sealed a 91 million euro ($125.5 million, £77.6 million) move for Gareth Bale.
However, Ancelotti insisted that it was his preference for Argentine winger Angel di Maria, rather than the arrival of Bale, which precipitated Ozil's sale.
"It was a technical decision," he told Spanish radio station Cadena SER.
"For the balance of the team I preferred to have Di Maria. He has less quality than Ozil, but for his character and help he gives the team, I wanted him.
"With the arrival of Bale, I thought it was more important to have Di Maria than Ozil, looking at the overall balance of the team."
Despite a series of stunning performances by Ozil on his arrival in England, the decision to keep hold of Di Maria has appeared a wise one as the Argentine has been in stunning form throughout the first two months of the season.
However, Ancelotti suggested that it will be Di Maria's place that Bale will take now that the Welshman appears to be over a series of niggling muscle injuries that have restricted his involvement so far.
Ancelotti dismissed suggestions that Bale could be hampered by a disc protrusion he is carrying in his back and hinted that he could even start in Madrid's biggest game of the season to date when they travel to face Barcelona on Saturday.
"The protrusion is a normal problem, I had two or three (during my career) and there was no issue. Since Bale has been here he has had no pain in his back. His problem was physical conditioning, he hadn't trained.
"Now he is fine, he is ready to play from the start."
And the Italian confirmed that he will play on the right side of the Madrid attack, precisely the position that Di Maria has occupied throughout his three years in Madrid.
"If you ask the player he says that he prefers to play from the right. I think he likes to start on the right so he can come inside to shoot on his left foot."
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