Adidas has been the Rossoneri's sportswear provider for 20 consecutive years, and agreed a 10-year deal worth €19.7million ($31m) per season in 2013.
However, the previous Milan ownership agreed to break clauses in the contract and the German company has opted out just five years into the deal.
Puma, another German sportswear giant, will take over as kit provider for the club from the start of 2018-19 season.
“Effective 1st July 2018, Puma will become our official partner, global technical supplier and official licensing partner," said Milan on their website.
The club's CEO Marco Fassone also commented on the new partnership, saying: "I am very pleased to announce our partnership with PUMA, to whom we are bound by mutual esteem and by our common passion for sports and football values.
"They represent a major international brand and we will be proceeding together in the next few football seasons in our strategic pathway striving to reach new and extraordinary goals off and on the pitch."
Puma already have powerhouse clubs Arsenal and Borussia Dortmund on their roster, as well as the national teams of Italy, Switzerland, Austria, Czech Republic, Ivory Coast, Cameroon, Ghana, and Senegal.
Star players with personal Puma deals include Sergio Aguero, Antoine Griezmann, Gianluigi Buffon and Marco Reus.