The Ivory Coast international has finalised a move to San Siro and will reportedly cost close to €28million when his permanent transfer is finalised.
The 20-year-old was said to have failed initial medial tests this week, casting doubt over the move, but he is reported to have passed a second set of examinations on Wednesday.
“AC Milan announces the signing of Franck Kessie from Atalanta Bergamasca Calcio, through to 2019,” a club statement released on Friday confirmed.
“The contract implies the player will join the club on a two-year loan period with obligation to buy.”
Kessie is the second signing Milan have made this week, following the completion of defender Mateo Musacchio’s move on Tuesday.
Bankrolled by the Chinese consortium that assumed majority control in April in a €740m deal, the seven-time European champions are expected to invest heavily in their squad in order to return to the Champions League and challenge for the Serie A title.