The 22-year-old defender has performed while on loan at Blackburn Rovers this season, where he has made 35 appearances and scored three goals.
According to The Mirror, Ancelotti has identified Adarabioyo to bolster his defence after conceding 56 goals in 38 games last term.
Adarabioyo who can also play at right-back has just 12-months left on his current deal with Cityzen are keen on the defender to sign a new deal so that he can push first-team place next season.
Manchester City have a lot of depth at center-back right now following the arrival of Nathan Ake. So it would be a little surprise if a potential move to Goodison Park appealed to Adarabioyo.
Adarabioyo is yet to make his Premier League debut for Pep Guardiola’s men. But he has demonstrated his potential out on loan, having spent time with West Bromwich Albion and Blackburn Rovers.
Should Everton sign Adarabioyo, he’d join Super Eagles playmaker Iwobi and Dennis Adeniran at Goodison Park.