The Italian midfielder has signed a new deal that will tie him to the Rossoneri until 2011.
Negotiations have been in the pipeline since the summer, and after some dialogue during the international break, an agreement has been found.
A statement on the club's official website reads:
"AC Milan would like to communicate that Massimo Ambrosini's contract has been extended until June 30 2011."
The move comes just months after the club announced that Ambrosini would become the new captain following Paolo Maldini's retirement.
The Italian midfielder began his career with the Rossoneri in 1995 after signing for them from Cesena.
He has won three Serie A titles, a Coppa Italia, and Italian Super Cup, two Champions Leagues, two European Super Cups and a World Club Cup with the San Siro-based giants.
Ambrosini is likely to return to action when Milan travel to Livorno this weekend.
Salvatore Landolina, Goal.com