The 30-year-old moved to the fashion capital of the world only last summer in a loan deal with an obligation to buy, but will now trade Italy for Spain in a bid to help Atléti mount a charge towards La Liga title.
Announcing Kalinić's signing on their official website, an Atlético statement said: "Atlético de Madrid and AC Milan have reached an agreement over the transfer of 30-year-old striker Nikola Kalinić. The Croat will join our club on a three-year deal."
Kalinić joins a number of high profile signings at the Wanda Metropolitano this summer, following the captures of France's World Cup winner Thomas Lemar, Spanish trio Rodri, Jonny and Antonio Adan, as well as foreign imports Gelson Martins and Santiago Arias.
The impressive collection of signings will undoubtedly raise hopes that Atléti will be able to sustain a serious title challenge this season, with star striker Antoine Griezmann having also committed to his future to the club by signing a new long-term deal prior to his success World Cup campaign with France.
That indiscretion aside, Kalinić boasts a generally favourable scoring record in recent years, with impressive spells with Dnipro and Fiorentina a prelude to his solitary season in Milan. He failed to hit up to expectations at San Siro, but will now be given the opportunity by Diego Simeone to prove his worth in Spain.