After ending their interest in Carlos Tevez, Milan will now turn their attention to extending the contract of boss Massimiliano Allegri.
The tactician’s present terms expires in June 2012 and talks over a new deal have yet to reach a compromise.
Both parties want to continue their relationship, but there is a difference of opinion when it comes to salary.
The Rossoneri want to offer the former Cagliari boss a deal worth €2m a season with bonus incentives that would see the tactician possibly net a further €500,000.
Allegri, however, wants a flat deal of €2.5m which is not dependant on achieving certain results.
The 44-year-old moved to San Siro at the start of last season and delivered the Scudetto at his first attempt.