AC Milan president Silvio Berlusconi has confirmed coach Leonardo will leave the club at the end of the season.
Leonardo had refused to discuss his future after the defeat to Palermo
Milan have again struggled to keep pace with city rivals Inter this season and there had been frequent speculation about Leonardo's future.
Leonardo refused to discuss his future this week after a defeat to Palermo left Milan unable to clinch the title, but Berlusconi has now announced that the search for a replacement is underway.
"Leonardo will leave," Berlusconi said. "We are working on a new coach."
Asked who would arrive in his place, Berlusconi said: "There are talks in place with others. Leonardo has been too tough-headed and the team has played badly this season."
Brazilian club Flamengo revealed earlier this week that Leonardo could join the club in a non-managerial role.
Following the dismissal of coach Andrade, president Patricia Amorim said: "The first person I thought of was Zico. I think he is everything that is right for this club. We talked about it, but at this moment he is not ready to return, although he knows that for him the doors are always open.
"What is another very interesting name is Leonardo. Not to coach - I'd have him as director general. He has the experience and ability to fulfil this role. Let's see what happens."
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