The Rossoneri have been linked with a move for the Serbian, but his price tag means a move to San Siro can't happen, at least this summer.
“In light of Financial Fair Play we won't be signing a top midfielder," Leonardo explained at Paolo Maldini's presentation Press conference.
“If we can find a way - within the rules - to pull off a miracle and sign a player who will bring a lot to the team then we'll try to do it. But we may not be able to.
“FFP says you can spend what you earn, at the moment we've spent more than we should have, which could have led us to be out of the Europa League.
“So now we have to be very careful to stick to the rules. To do that we have to increase our revenue and our income. It will take time, it's not possible to do it immediately.
“Milinkovic-Savic is a dream for many teams, unfortunately right now dreaming about a player who is worth so much is not possible for us.
“Even a year ago when I was asked to choose one Serie A player he was the one I picked. He's the complete modern midfielder, but it's not financially possible for us to sign him."