"I've always said I wanted to play in the USA and now I have reached an agreement to play there," he told Milan's TV channel on Monday.
Kaka will initially move on loan to Brazilian side Sao Paulo where he spent the first two years of his career before being sold to Milan in 2003.
"Orlando City is a new team with a good project and the owner (Flavio Augusto da Silva) is Brazilian," added Kaka.
"I'm also happy to return to Sao Paulo. It's really satisfying for me."
Earlier, Milan announced they had terminated Kaka's contract by mutual agreement.
The 32-year-old had long been tipped to sign for Orlando and, as the Kaka interview was being broadcast, the American club posted a silhouette on their Twitter feed of him celebrating a goal in their purple and white colours.
The Brazilian pledged to never again wear 22 on his back, his Milan shirt number.
"I want to leave that memory with the Milan fans. I think I will wear number eight for Sao Paulo and number 10 for Orlando," he said.
REAL SPELL
Kaka returned to Milan in 2013 after four injury-hit seasons at Real Madrid.
The Italians finished eighth in Serie A last season and missed out on Europe for the first time since 1998 after a wretched campaign during which they sacked two coaches, Massimiliano Allegri and Clarence Seedorf.
Former Milan great Filippo Inzaghi, who played alongside Kaka during the Brazilian's first spell at the club, has now taken over at the San Siro after impressing as youth team coach.
"Inzaghi and I are friends and I wish him all the best for next season. He loves Milan and therefore he could have a great season," said Kaka.
The former World Cup winner's Serie A comeback was viewed as a gamble but despite picking up a thigh strain in his first match he eventually had a solid season.
In seven years at Milan he scored 104 goals and amassed 307 appearances, winning a Serie A title, the Champions League and a Club World Cup.
"It was wonderful for me to return to Milan and reach 300 matches and 100 goals for the club. Everything that I am is because of this club and it wasn't easy to leave," said Kaka who helped Brazil win the World Cup in 2002.
The playmaker missed out on a place in the host nation's squad for the 2014 World Cup.
"When I was at Madrid I had almost no chance of a Brazil place but it was different at Milan," said Kaka. "Last season gave me a lot even if I wasn't picked in the end.
"Coming back was important for me, it was a special season for me as a man and the fans have always been by my side. I will be a Milan fan forever."
(Editing by Tony Jimenez)
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