AC Milan have reached an agreement with Sinisa Mihajlovic to terminate his contract at the end of next month.

The former defender was appointed as head coach on a two-year deal last June but was sacked in April after failing to sustain a challenge for the Champions League places.

Mihajlovic is reported to have met with Milan CEO Adriano Galliani in Rome last week to negotiate the finer details of his contract termination, and the club announced on Monday that a deal had been struck to end his deal a year early.

"AC Milan will terminate Sinisa Mihajlovic's contract with the club from 30/06/2016," a club statement read. "Everybody involved at AC Milan wishes him the best for his future."

Mihajlovic is tipped to take over at Torino, with Giampiero Ventura rumoured to be the favourite to succeed Antonio Conte as Italy head coach.

The future of interim boss Cristian Brocchi remains in question, with the former Privamera boss having failed to steer Milan into the European spots in Serie A before losing the Coppa Italia final 1-0 to Juventus on Saturday.

President Silvio Berlusconi indicated that Brocchi's future will depend on the demands of the Chinese investor group currently in talks to buy the club.

"We'll see how the whole issue of the sale goes," Berlusconi told Ansa.

"I was convinced that I was doing the right thing by putting Brocchi there. He is a reliable and capable person."