Spanish daily Sport had claimed earlier on Saturday that PSG were lining up a 30 million euros bid for the striker as they are desperate to add to their attacking options.
Questioned about the report, Ancelotti rated Villa as a quality striker, but ruled out a move for the 30-year-old, who spent most of last season on the sidelines with a fractured tibia.
"We have not thought about David Villa for the simple reason that he has been injured for a long time," Ancelotti told a press conference.
"He is a great forward, but we are in the process of searching for one who does not have physical problems.
"Besides, I do not even think that Barcelona would let him go."
The Italian coach then commented on the situation of Mamadou Sakho, who revealed earlier in the month he could leave PSG if the club signed a new centre-back in the summer.
"He has to understand that PSG will become a big club, and that at every big club, there is a lot of competition to win a place," Ancelotti said.
"I hope that Mamadou accepts the competition like he told me when we had a discussion together.
"I make my decisions solely in relation to what I see on the pitch, rather than a player's price tag.
"If he asks to leave, it well be up to the club and myself to make the decision, but today I say that Sakho will stay."
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