The Portugal Under-21 full-back is out of favour and could be one of the players offloaded to raise funds for Manchester United's recruit drive this summer.
Ancelotti could make a £10million move for Dalot, 21 as he seeks a long-term replacement for Seamus Coleman, according to the Daily Mirror.
His versatility also appeals as he could cover for Lucas Digne at left-back, as well as play in midfield or as a wing-back.
Dalot missed United's 2-1 win over LASK in the Europa League on Wednesday, and may now have played his last game for the club.
Barcelona are also reportedly ready to launch a bid for Dalot.
The Catalans were keen to sign Dalot back in 2018 when he was on the books at Porto but were outbid by United, who paid £19 million to secure his signature.
But his time at Old Trafford hasn't gone according to plan, with Dalot making just 11 appearances in all competitions this season.
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