Florenzi made 30 appearances in all competitions in the 2021-2022 campaign, including 24 league outings in Milan's first Scudetto-winning campaign in 11 years.
Having played his part in that historic triumph, Milan announced on Friday they have taken up the option to sign Florenzi on a three-year-deal.
The Italy international had been on Roma's books since 2011, but he fell out of favour and spent time on loan at Valencia and Paris Saint-Germain prior to joining Milan.
Milan also announced on Friday that back-up goalkeeper Antonio Mirante, who did not feature at all last season, has extended his contract until the end of this coming season.
It comes after club directors Paolo Maldini and Frederic Massara – who overlook transfer activity – extended their own stays at San Siro.
Stefano Pioli's men begin their Serie A title defence at home to Udinese on August 13.