Speculation has linked the club with a move for the out-of-favour Balotelli, with current club City ready to drop his asking price to £20 million, as exclusively revealed by Goal.com.
The Italian side were also in talks with Real Madrid about the possibility of bringing Kaka back to the San Siro, but Berlusconi revealed that his club may not have the finances to pull off either move.
Speaking on Radio 2 in Italy, Berlusconi said: "Neither Balotelli nor Kaka will arrive at Milan. These are impossible deals in times like this."
The Rossoneri are currently attempting to downsize financially, having allowed Zlatan Ibrahimovic, Thiago Silva and Alexandre Pato to leave in the past few months, but have been strongly mooted as a destination for the unsettled Balotelli, who is a lifelong fan of the club.
A move for former favourite Kaka would be welcomed with open arms by the fans, but now also looks unlikely in light of Berlusconi’s comments.