The experienced centre-back has penned a new contract with the Rossoneri despite having featured infrequently for the Serie A giants this season
The 36-year-old's previous contract expired at the end of the season, and he has now extended his stay at San Siro until the summer of 2013.
The announcement comes just hours after team-mates Gennaro Gattuso and Filippo Inzaghi both confirmed that they will be leaving the Rossoneri in June.
Yepes, who signed for Milan in 2010 on a free transfer, has made 10 competitive appearances in 2011-12.
Milan CEO Adriano Galliani is currently in the process of handling contract renewals as six other players are set to become free agents in the summer.