The Rossoneri announced that the Ghana midfielder is to arrive in Milan on Friday as a deal to bring the 31-year-old to San Siro looms.
Essien has been on the periphery of the Blues first XI this season, making only five Premier League appearances. The midfielder is expected to be released on a free transfer and will join the Rossoneri on an 18-month deal.
A statement on the club's official website said: “Just turned 31 and with a CV including domestic and Champions League wins as well as victory with the Ghana national side, Michael Essien is expected to land at Malpensa Airport (Milan) this evening.”
The Rossoneri have struggled for form this season but have been recently been taken over by Dutch coach Clarence Seedorf after Massimilano Allegri's sacking.
The club sits 11th in Serie A with 25 points, 30 points behind leader Juventus.
Milan plays Atletico Madrid in the last 16 of the Champions League, which Essien would be eligible for as he was unregistered for Chelsea's European campaign.
Essien won the Champions League with the Premier League club in 2011-2012 season but was an unused substitute in the final against Bayern Munich.