The former Cardiff City man has been linked with a return to the Premier League this summer.
"Medel? We won't sell him," Mancini said, in quotes published by Goal.com.
"We do have to sell some players because we are only allowed 25 in the squad. However, Medel is not on the exit list, so he will remain with the team.
The 28-year old performed well in his debut Premier League campaign with Cardiff two seasons ago but was unable to prevent the Bluebirds from returning to the Championship.
He made the switch to Mancini’s Inter last summer and has gone on to become one of the Nerazzurri’s key men.
Do Liverpool need him?
The arrival of James Milner and growing calls for Emre Can’s utilisation in a holding midfield role mean the Reds’ needs for a playing of Medel’s ilk isn’t critical.
Lucas Leiva’s influence may be waning but he still represents a solid squad member and despite Joe Allen’s recent injury, as reported on the club’s official site, Liverpool remain well stacked in central midfield, with new captain Jordan Henderson set to have his biggest season yet.
It could be argued that despite these plentiful midfield options, Liverpool still lack a true destroyer capable of doing the dirty work but Medel's signing would be nothing more than a luxury purchase for Brendan Rodgers.