UPDATE 3-Soccer-Ancelotti leaves Milan, Leonardo to take over

* Ancelotti says he is leaving AC Milan

* Leonardo to be unveiled as replacement

* Ancelotti does not name Chelsea as destination but hints (Adds further quotes, details)

By Mark Meadows

MILAN, May 31 (Reuters) - Carlo Ancelotti has agreed to leave AC Milan but would not confirm on Sunday that he will be taking over as Chelsea coach.

Milan's Brazilian sporting director Leonardo will replace Ancelotti as coach at the San Siro.

Ancelotti's contract was due to run out in 2010 but speculation has been rife for months that he is heading to Premier League Chelsea.

"In agreement with the club, we have decided to bring forward the expiry of my contract. This beautiful adventure at Milan is over," he told Sky after his side sealed the third Champions League spot on the final day of the Serie A season.

"I can't say anything else official. I have not made any agreement with any other club."