The 24-year-old moved to San Siro on loan for the remainder of the campaign in January and has scored twice in nine appearances under Clarence Seedorf.
Having made a reasonably impressive start to life in Milan, agent Vincenzo Morabito expects his client to move permanently at the end of the campaign.
According to Morabito, it would be "extraordinary" for a permanent deal not to be completed, with a fee already settled on.
"Milan will take up their option and there is already a deal between the two clubs to sign him at the end of the season for a reasonable, symbolic price," he told fantagazzetta.com.
"It won't be any more than €3 million (£2.5m) or €4 million (£3.3m). It would mean something extraordinary if that didn't happen."
Taarabt arrived midway through what has been a turbulent campaign for Milan, who appointed Seedorf as Maximiliano Allegri's replacement in January.
While Seedorf has been able to bring about an upturn in fortunes at San Siro, Milan have bowed out of the Champions League and the Coppa Italia since the turn of the year and sit 11th in the Italian top flight.