The 24-year-old Morocco international joined Fulham on a season-long loan from relegated Rangers last summer but has made just 16 appearances in all competitions for the Cottagers.
"In order for his transfer to the Rossoneri club to be made official, we must wait for the necessary procedures to take place."
Former Lens and Tottenham playmaker Taarabt says he is looking forward to linking up with former Manchester City striker Mario Balotelli at the San Siro.
"I am honoured to be able to play in the best club in the world," Taarabt told the official website. "I have spoken to (AC Milan coach Clarence) Seedorf and we are both really happy.
"I am a striker and I like to play behind the forwards.
"I don't know personally Balotelli but I know very well who he is and it will be great to play with him."