Spanish radio station Cadena Ser is reporting Kaka has signed for Real Madrid in a €65million (£56million) deal, although his spokesman has countered that while an approach has been made no agreement has yet been struck.
Kaka's father and agent, Bosco Leite, reportedly revealed that a deal was agreed following talks between newly-installed Real president Florentino Perez and AC Milan vice-president Adriano Galliani and Leite.
However, Kaka's spokesman Diogo Kotscho said: "Kaka will listen to Real and decide whether or not to make the transfer.
"What I can say for certain is that the Spaniards and Milan have not reached any agreement."
Earlier on Tuesday the Brazilian reiterated his desire to stay at the San Sio, amid reports Chelsea had discussed with Milan officials his possible transfer when finalising Carlo Ancelotti's switch to Stamford Bridge.
It is Madrid though who have stolen ahead of their English counterparts in their efforts to land a player widely regarded to be one of the world's finest.
Kaka told Gazzetta dello Sport on Tuesday: "I say it for the last time. I don't want to leave Milan."
However, his declaration to the Rossoneri cause has failed to quell talk of a departure to ease the club's considerable debt.
Milan owner Silvio Berlusconi intimated prior to the reports breaking in Spain that his club could lose their talisman.
"I do not know if we can keep Kaka at Milan because they (Madrid) have offered him so much money," he told Italian news agency Ansa.
"You can't keep someone against his will. I have not spoken with Leonardo or Galliani yet."