AC Milan vice-president Adriano Galliani has revealed Robinho accepted a pay-cut to sign his new contract.
A move to Santos fell over this month over personal terms.
Galliani said: "Robinho agreed to cut his wages and extended the contract. I told him 'you didn't do much last season, so you are basically a new signing and have to prove what you can do.'
"It's not that Robinho wanted to leave Milan, he just wanted a return to his 'home' Santos, but as it wasn't possible we all decided to begin again.
"I think we have a squad that is very competitive and covered in all positions. If someone were to leave, then we would bring in a replacement, but we believe this team is able to finish on the Serie A podium."