The 24-year old Moroccan playmaker has had his season-long Fulham loan terminated in order to sign a deal with the Rossoneri until the end of the campaign with the view to a permanent contract.
Taarabt has met with Milan vice-president Adriano Galliani with pictures surfacing of the pair shaking hands after signing the agreement.
"I am honoured to be able to play at the best club in the world," Taarabt told Milan Channel on Thursday.
"I have spoken with (manager Clarence) Seedorf and we are both happy. I am an attacker and I like to play behind the strikers.
"I do not know (Mario) Balotelli personally, but I know who he is and I am pleased to be able to play with him."
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