The 40-year-old joined the Italian giants as a free agent last summer on a one-year deal, ending his incredible 13-year spell at Real Madrid.
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Despite his age, Modric was a key man for AC Milan, scoring two goals and providing three assists in his 37 games across all competitions.
According to Sky Sport Italia, AC Milan’s persistence has paid off, and Modric is set to sign a new one-year deal.
The board, alongside new head coach Ruben Amorim, had been working tirelessly to convince Modric to remain at the club.