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Trent Alexander-Arnold is set to depart Liverpool this summer.
Carlo Ancelotti and Real Madrid have, reportedly, reached an agreement over the terms of his departure.
The 65-year-old is in his second spell as manager of the club and, after winning the Champions League three times, is the most decorated coach in Real's vast history.
However, The Athletic are reporting that his second spell at the Santiago Bernabeu is set to come to an end this month after he reached an agreement with Madrid over issues relating to his salary.
Ancelotti is contracted with the Spanish giants until 2026, but he will leave the club at the end of the season to manage Brazil's national team.
It means that Madrid will need to decide who will take charge of the team at this summer's Club World Cup that will be held in the United States.
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The Athletic indicates that the 15-time Champions League winners are keen to appoint former Liverpool midfielder Xabi Alonso, who won the Bundesliga and DFB Pokal in his first full season with Bayer Leverkusen last year, though it could be difficult to poach him in time for Madrid's first game in the competition on June 18.
Reports that Ancelotti will depart Madrid at the end of the season come on the same day that England star Trent Alexander-Arnold announced he would be leaving Liverpool.
The 26-year-old, two-time Premier League winner, insisted it was not an "easy decision" to leave his boyhood club after more than 20 years.
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"I think first and foremost, I want to say it's not an easy decision and there's a lot of thought and feeling that has gone into it," Alexander-Arnold told the official LIverpool FC website on Bank Holiday Monday.
"I've been here 20 years now, loved every single minute of it, achieved all my dreams, achieved everything I've ever wanted to here.
"Giving everything day-in, day-out for 20 years, I have got to a point now where I feel like I need a change, a new challenge for me as a player and as a person.
"And I think now is the right time for me to do that."
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Although Alexander-Arnold's next transfer is yet to be confirmed, he's expected to sign for Spanish and European champions Real Madrid when his contract expires at the end of the season.
However, he could feature for the Spaniards at this summer's Club World Cup finals in the United States if Madrid are able to agree a fee with Liverpool to release him from his contract early.
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