Guardiola, 44, has been linked with Manchester City, Manchester United, Chelsea and Arsenal.
The former Barcelona coach has won two league titles and the German Cup since joining Bayern in summer 2013.
Former Chelsea manager Ancelotti, 56, has been on a break from the game since being sacked by Real Madrid in May 2015.
"We are thankful to Guardiola for all he gave our club and hope to celebrate more success in the current season," Bayern chief executive Karl-Heinz Rummenigge told German newspaper Bild.
"With Ancelotti we have another very successful coach coming to Bayern. We are looking forward to working together."
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