The Dutchman ends a three-year stay at the Etihad Stadium and will now be available for selection in tomorrow's Serie A clash with Bologna.
"AC Milan announces that it has bought outright Manchester City's Nigel de Jong, who has signed a contract until June 30, 2015," read a statement on the club's official website.
De Jong, who has 63 caps for the Netherlands, said that he is excited at the prospect of playing for the Rossoneri - in particular against Inter Milan.
"Milan will be competitive — both in Italy and in Europe. It is a fascinating club with a great history," said the 27-year-old. "After having experienced the Manchester derby, I will now get to experience the Milan derby."
The defensive midfielder joined the Citizens from Bundesliga outfit Hamburg for £18m.