Allegri is regarded as one of Italy's brightest young coaches
Serie A club Cagliari have paved the way for Massimiliano Allegri to succeed Leonardo as AC Milan coach after they released him from his contract.
"Following a request by AC Milan, president Massimo Cellino decided to release him" said a Cagliari statement.
"Cagliari have not requested any compensation, given the impossibility of quantifying the value of feelings."
Allegri, 42, has been Milan's long-term choice to succeed Leonardo, who was sacked after one season in charge.
The 40-year-old Brazilian stepped up from his role as Milan's technical director to succeed Carlo Ancelotti in May 2009 when the Italian left for Chelsea.
But Leonardo struggled to improve an ageing team, with Milan finishing third, 12 points behind city rivals Inter as they failed to win a first title since 2004.