It was reported earlier on deadline day that AC Milan were lining up a bid for the midfielder but he has instead wound up joining the Nerazzurri on loan, with the option of a permanent switch to San Siro in the summer.
"I am very pleased to have arrived at Inter, into a great team,” the midfielder told his new club's official website.
The signing of Palombo, who has been capped 22 times by Italy and had also previously been linked with Serie A leaders Juventus, comes on a busy day of transfer activity for Inter.
Sulley Muntari has joined Milan on loan and Fredy Guarin has arrived from Porto, while Thiago Motta is expected to join Paris Saint-Germain before the transfer window shuts.
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