Outgoing manager has given his backing to "fantastic" to replace him at the Bernabeu, with the Italian expected to depart in the coming weeks. This week and he is being widely tipped to become the next man in the dugout at Madrid.
Alonso is one of the most sought-after managers in football after performing miracles at Leverkusen to deliver their first Bundesliga title in their 119-year history, while also lifting the German Cup in the same season.
This season Leverkusen weren't able to hit the heights of last season as they missed out on the title to rivals and were knocked out of the German Cup by third-tier outfit Arminia Bielefeld in the semi-finals.
But Alonso is still being touted to progress his successful management at a bigger club and the Spaniard has been strongly linked with a move to his former team.
Recent reports claimed Alonso had already verbally agreed to join Madrid, signing a deal until 2028, while Ancelotti is also believed to have agreed his exit.
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While the Italian is yet to formally announce his own exit, he has commented on Alonso after hearing he left Leverkusen and had nothing but praise for the ex-Liverpool midfielder.
"I saw [Alonso's announcement]," Ancelotti said on Saturday speaking to the media ahead of Real Madrid's El Clasico showdown against on Sunday.
"I've read he's leaving Leverkusen, where he's done a fantastic job. All doors are open to him, because he's shown himself to be one of the best coaches in the ."

Ancelotti - who managed Alonso as Bayern Munich boss - will leave Madrid as a legend after winning two titles and two trophies in his second spell, having already lifted four trophies in his first stint.
He will be a tough act for Alonso to follow if he does end up becoming the next manager, though he decided to stay quiet about his future when announcing his exit. The 43-year-old said: "This week the club and I have agreed that these two games are going to be my last as Bayer Leverkusen coach.
"It is not a moment to talk too much about the future because we want to have a proper farewell on Sunday here for some players, for myself, and it is the right moment to announce it.
"We have to enjoy this moment with mixed emotions. It is emotional, I spoke this morning with the players, the staff, so many people who have helped me during an unbelievable, fantastic three years. Now is a moment to share it with the fans in this stadium where I have lived great emotions and become what I am right now."
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