Modric, who signed a new six-year deal last year, was quoted by media last month as saying he wanted to leave for Premier League rivals Chelsea.
"We had a very good conversation and, as I've said previously, Luka Modric will not be sold. That's the end of it," Levy told Sky Sports News.
"He's been on holiday but we've now had the conversation and he understands our position. I'm sure once he's back with his team-mates everything will be fine.
"This is not about money. We're not selling our best players."
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.