Despite early optimism, the transfer now appears unlikely, leaving the Rossoneri to explore other options to bolster their midfield.
Sky Germany reported no ongoing negotiations between the two clubs for the 32-year-old Swiss international.
Leverkusen's sporting director, Simon Rolfes, firmly shut down speculation, stating, "There have been and are no negotiations with Milan for Granit Xhaka. Nor do we intend to sell him."
With Xhaka under contract until 2028 and valued at around 40 million euros by Leverkusen, the financial demands have proven too steep for Milan, who have also baulked at the overall cost of the deal.
Milan's sporting director, Igli Tare, had initiated contact with Xhaka's representatives, and the player himself expressed openness to the move, with his father, Ragip Xhaka, confirming, "Milan want to sign Granit." Posts on X also highlighted early talks, with @FabrizioRomano noting on June 19, that "club-to-club talks have started as Xhaka is open to joining AC Milan project."
However, Leverkusen's resolve, coupled with their recent losses of key players like Florian Wirtz and Jeremie Frimpong, has made them determined to keep Xhaka, a pivotal figure in their Bundesliga title-winning campaign.
Adding to the complexity, Leverkusen's new manager, Erik ten Hag, is actively working to convince Xhaka to stay, emphasizing his importance to the squad. Xhaka, who contributed two goals and seven assists in 49 appearances last season, remains a cornerstone of the team's midfield, averaging 9.54 progressive passes per game.
Meanwhile, Milan are shifting focus to other targets. They are in advanced talks with Torino for Samuele Ricci and have tabled a new 30-million-euro offer for Club Brugge's Ardon Jashari after an initial bid was rejected. The Rossoneri are also close to securing veteran midfielder Luka Modric on a free transfer, with the Croatian set to sign a one-year deal after the Club World Cup.
Despite Xhaka's willingness to embrace a new challenge in Serie A, Leverkusen's firm stance has all but ended Milan's hopes.
For now, Xhaka remains a key pillar for Leverkusen, and Milan must regroup to find the spark they need for the upcoming season.
Borussia Dortmund secured their place in the FIFA Club World Cup knockout stages with a hard-fought 1-0 victory over Ulsan HD in Group F, thanks to a clinical first-half goal from Daniel Svensson.
Luka Modric has verbally agreed to join AC Milan following the conclusion of the Club World Cup in the United States, according to the club's sporting director, Igli Tare.
Swiss midfielder Granit Xhaka is edging closer to a return to Serie A, with AC Milan making the 32-year-old their top transfer priority ahead of the 2025-26 season.
Bayern Munich have secured their FIFA Club World Cup knockout spot, but young goalkeeper Jonas Urbig will stay benched unless Manuel Neuer is injured, coach Vincent Kompany has confirmed.
