Alonso established himself as a key member of Real Madrid's starting XI last season as Los Blancos went on to wrest Barcelona as the winners of La Liga.
His agent Luis Ignacio Ibanez Echeverria rubbished the notion that Alonso will move to another club.
"Xabi is a player of Real Madrid and will continue remaining a player of the club," Echeverria told SpazioMilan.it. "There is absolutely no truth in the interest from Milan.
"He just won the European Championship with Spain, plays in the world's best league and still has a two-year contract with Real. Why should he move?
"The real truth is Xabi Alonso will not move from Real Madrid," his agent concluded.
Alonso was also a key memebr in Spain's squad as they retained their title as European champions in Euro 2012.