The report has claimed that the Italian giants will now decide whether to follow up their interest with a move for the French youngster.
According to The Scottish Sun, Celtic value the 21-year-old striker at £20 million-plus.
Dembele, who scored for the Bhoys in the 7-1 defeat to PSG, is one of the best young strikers in Europe.
It is only a matter of time before the youngster leaves Celtic Park given his strong reputation, but it is hard to see Celtic entertain any bids for him in the January transfer window.
If Milan want to sign the former Fulham youngster, then they would be better off making a move for him next summer.