The Nigeria international joined the Rossoneri on a free transfer last summer but failed to establish himself at San Siro, spending the second half of the previous campaign at QPR.
Aware that his situation at Milan would not improve, Taiwo has decided to move again and is happy with his decision, telling the BBC: "Coming to the Ukraine is a great opportunity for me to earn a regular first-team place.
"I know Milan are a big club but I am not a player who is happy to sit down and collect a salary without playing football."It was a dream to move to AC Milan but to be honest I never had the chance to show what I am capable of doing but that is life.
"I chose to come to Dynamo Kiev because of the opportunity to play in the Champions League and also to experience a new life.
"It was very important to consider my international career and I took this decision with that in mind."Dynamo Kiev have retained the option to buy Taiwo outright at the end of the season for €2 million, should the former Olympique de Marseille man impress.