The 28-year-old had been linked with a move to England - with Manchester City, Liverpool and Tottenham all said to be interested - but Milan president Silvio Berlusconi confirmed his club had won the race for him.
Berlusconi, Italy's controversial prime minister, said: 'Yes. We will be signing Cassano. I am also very happy with how the side are playing.'
Time for a change: Cassano (left) is heading for Serie A leaders AC Milan
The move raises further questions about the future of Ronaldinho, who is out of contract at the end of the season and struggling to get in the Milan side because of Robinho's form.
Brazilian sides Flamengo, Palmeiras and Gremio are all keen to take him back home.
Berlusconi, who has previously insisted that the 30-year-old would sign a new contract at the San Siro, admitted: 'It is a shame for Ronaldinho. At the moment, he has not been playing well or training as well as he can.'
Homeward bound: Ronaldinho has plenty of admirers back in his native Brazil
Cassano will officially link up with the Rossoneri once the Serie A transfer window reopens on January 2, though he is free to join Milan at their winter training base in Dubai before putting pen to paper.
It is understood that the deal put to Cassano will run until 2014, and is on reduced terms compared to what he was earning at Sampdoria.
He was desperate to leave the Genoa-based club after falling out with president Riccardo Garrone.
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