Los Blancos have confirmed an agreement was reached to allow Benzema to leave on the free transfer when his contract expires in the coming days.
The news has caused some shock in Madrid, after Benzema previously hinted he wanted to remain in the Spanish capital, and sign a 12-month renewal.
However, the former French international has since changed his stance, and is now expected to complete a move to Saudi Arabian side Al Ittihad as part of a two year contract.
Ancelotti was asked about a chaotic 24 hours at the club, following Benzema’s goal in Real Madrid’s 1-1 season finale against Athletic Club, he admitted the call was a surprise.
“I have trained one of the best players in the world. I’m not happy, but we must respect him. He earned the right to decide”, as per reports from Marca.
“He’s done legendary, unforgettable things. It was a surprise, but it’s part of a transition.
“We have time to think about what we will do. I spoke to him this morning and he told me he was leaving.”
Benzema is joined on the released list by Mariano Diaz and Eden Hazard, with Ancelotti controversially opting against giving either player a farewell cameo role off the bench, at the Estadio Santiago Bernabeu.