The Rossoneri confirmed at the weekend that they were keen to reunite with the Italy international, who left for Anfield in a £16 million deal last summer.
And Milan have now announced via their official television channel that the former Manchester City striker is due for a medical in Italy ahead of finalising his switch back to Serie A.
Balotelli managed just one Premier League goal in 16 appearances for Liverpool last season and has been frozen out of Brendan Rodgers' plans since the summer arrival of Christian Benteke from Aston Villa.
"Balotelli convinced us to get him back," Milan CEO Adriano Galliani said prior to the 2-0 defeat to Fiorentina on Sunday. "He is aware that we are giving him his very last chance."
Balotelli scored 30 goals in 54 appearances in all competitions during his first stint with Milan.
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