A statement on the club's official website said: "There has been a meeting between [Milan vice president] Adriano Galliani, Stephan El Shaarawy and the young star's entourage.
"Everything went well. Stephan has always been an AC Milan fan and has reiterated his determination to continue playing for the Rossoneri.
"That pledge was reciprocated by Milan, with conviction. Milan and El Shaarawy will move forward together, as they have since 2011. No more talk of the transfer market, no more rumours. AC Milan, the Rossoneri colours and the 'Faraone' will absolutely continue on together."
El Shaarawy scored 18 goals for Milan last season.