The former Inter defender stood down as Sampdoria boss at the end of last season and has now been confirmed as Filippo Inzaghi's successor
AC Milan have announced the appointment of Sinisa Mihajlovic as the club's new coach on a two-year contract.
The Serbian's arrival was confirmed just under 90 minutes after the Rossoneri confirmed the dismissal of Filippo Inzaghi halfway through his deal with the San Siro side on Tuesday.
Mihajlovic led Sampdoria to a seventh-placed finish in Serie A last season but stepped down at the end of the campaign, revealing in an open letter to the club's fans that he was seeking "another challenge".
The 46-year-old had initially been expected to succeed Rafael Benitez as Napoli boss but the former Inter defender has now returned to San Siro to take charge of the Nerazzurri's city rivals.
"Sinisa Mihajlovic, who has signed a two-year contract, will be the new coach of AC Milan for next season," read a statement on the Rossoneri's official website.
"The club wish him good luck in his work and the best results."
Milan had originally sought to re-hire Carlo Ancelotti, after he was sacked by Real Madrid last month, but the 55-year-old ultimately decided to follow through with his plan to take a break from the game in order to recover from scheduled back surgery.
Mihajlovic spent two years with Inter before retiring in 2006 and taking on the role of assistant coach Roberto Mancini, who is now back in charge of the Nerazzurri.
The set-piece specialist then took the top job at Bologna before enjoying spells with Catania, Fiorentina, Serbia and Samp.