Ballack, 34, played in 45 games for the Blues last season as they enjoyed a successful campaign after winning the Premier League and FA Cup.
However, the Germany international was one of five senior players who left Stamford Bridge during the summer, with Joe Cole, Ricardo Carvalho, Juliano Belletti and Deco all shown the exit door.
Ballack is now back at Bundesliga outfit Bayer Leverkusen and has revealed that boss Ancelotti did not have the final say on whether he left Chelsea.
"I had the feeling that when we spoke about it that he wanted to keep me but it became different. And that was the situation," he told The Independent.
The departure of the five senior players from West London is thought to have trimmed £20million from the annual wage bill, as owner Roman Abramovich's cost-cutting measures came into effect.
Chelsea announced the decision not to renew Ballack's contract in June, and he met Ancelotti in America where the Italian admitted his surprise at the situation.
He added: "We had lunch together. That was the time when the club told me that we would not sign a new contract.
"Yeah, we spoke about this and I had the feeling that he was a little bit surprised but in the end, that's football, and that's what I said.
"It had nothing to do with the relationship with me and the coach or the players or the club.
"I am professional enough to accept the decision. I have to move on and the club has to move on."
Former assistant manager Ray Wilkins had his contract terminated last week and Ballack admits he was shocked at the decision.
"I spoke to Ray and he was disappointed," he remarked. "As a former player from the outside it was a surprise because it is the middle of the season and they are in first position (in the Premier League), with all the success of the past year."
Chelsea travel to Birmingham in the league on Saturday hoping to bounce back from their disappointing 3-0 defeat to Sunderland last weekend, and Ballack insists there will be a response.
He said: "I think they will give a reaction. That's how I know the club and the players. They are big players."
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