Ancelotti left Everton to return to Real Madrid earlier this week in a shock move which has left the Toffees stunned.
The Italian held a transfer meeting with the director of football Marcel Brands last week and it was only toward the end of last week that it emerged that he was a serious contender to replace Zinedine Zidane in Madrid.
Everton did not stand in his way once he made it clear that he wanted to join Real Madrid and agreed his termination without any hiccups.
The Toffees have already been linked with a number of managers, but are not expected to make an appointment immediately.
They are still sorting through a shortlist and former Wolves boss Nuno Espirito Santo and former Everton manager David Moyes are the frontrunners.
Moyes will be out of contract at West Ham at the end of the month and a three-year deal has reportedly been agreed.
But he is yet to sign on the dotted line and West Ham want clarity from the Scot whether he wants to stay on after leading them to a sixth-place finish in the Premier League last season.
Nuno is out of work and Everton have been linked with wanting to talk to him.