The former Tottenham and Portsmouth midfielder is free to rejoin Milan in January after the Bundesliga club decided to cut short the Ghana international's contract.
Schalke have agreed to terminate the contract of attacking midfielder Kevin-Prince Boateng.
Boateng - who moved to Schalke from AC Milan in August 2013 - is expected to rejoin the Serie A club and has already been training and playing in friendlies with them for over two months.
The Ghana international was suspended by Schalke following May's 2-0 defeat at Cologne, with the club blaming a "lack of mutual trust" and informing Boateng he could find a new club.
And a statement on Schalke's official website read: "FC Schalke 04 and Ghana international Kevin-Prince Boateng have decided to mutually terminate his contract at the club. The terms of the agreement will remain undisclosed.
"He made 60 competitive appearances [46 in the Bundesliga, twelve in European competitions and two in the DFB Cup], in which he scored seven goals. The 28-year-old will become available to play for other clubs on 1st January 2016."
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