Chelsea suffer transfer blow as 'AC Milan offer Rafael Leao a new long-term contract at the club'

AC Milan are set to offer Chelsea target Rafael Leao a new long-term contract at the club as they are reluctant to sell him to the Premier League giants for anything less than £127million.

Leao - who joined AC Milan from French side Lille in 2019 - scored 14 goals in all competitions during the 2021-2022 campaign and helped the Serie A giants win their first league title since 2011.

As a result, several clubs registered their interest in signing Leao this summer - despite the fact he is under contract with AC Milan until June 2024.

Chelsea are one of the European clubs to have registered an interest in signing Leao. They were impressed by the fact he won Serie A's Most Valuable Player award last season.

Having picked up the individual accolade during the 2021-2022 campaign, Leao has followed in the footsteps of previous winners including Romelu Lukaku, Paulo Dybala and Cristiano Ronaldo.

Thomas Tuchel believes Leao would be a valuable addition to his squad - despite the fact Chelsea have just confirmed the signing on Raheem Sterling from Manchester City.

However, according to La Gazetta Dello Sport, AC Milan have decided to offer Leao a new long-term contract at the club - shutting down Chelsea's chances of a potential transfer swoop.

The 23-year-old, who is currently under contract at San Siro until 2024, is said to be keen on staying in Italy after enjoying one of his most successful seasons to date.

While Milan, who qualified for the Champions League for the first time in seven years, are eager to strengthen there squad and hold onto their most valuable players ahead of next season.

The news will come as a blow to Chelsea. However, the Premier League giants will reveling in the fact they secured the services of Sterling.

Sterling completed a £50million move to Chelsea on Wednesday - penning a five-year deal worth more than £300,000-a-week.

Sterling spent seven years at the Etihad following a £50m switch from Liverpool, making more than 300 appearances and winning 11 trophies but is understood to have moved for more regular first-team football.

Sharing the news of his decision to leave Manchester City on social media, Sterling wrote: 'Seven seasons. Eleven major trophies. A lifetime of memories.

'To the coaching staff who have played a massive role in my development over the years, to my team-mates who have become more than just those I share a pitch with, to the backroom staff, to the office staff, to the fans who have tirelessly supported the team, and to everyone associated with Manchester City, my respect for you couldn't be greater.

'What a ride it's been. I am thankful for the ups and downs, as it's the downs that have, at times, have tested my strength and resolve, and enabled me to stand here in front of you as the best possible version of myself.

'I arrived in Manchester a 20-year-old. Today, I leave as a man.

'Thank you for your endless support. It's been an honour to wear the shirt of Manchester City.'