Pato has been strongly linked with a move to French side Paris St Germain in recent days.
PSG sporting director Leonardo stated on Thursday that he was ‘optimistic’ that the club could sign Pato.
“Milan is my home,” Pato told the club’s official website.
“I don’t want to interrupt my career with the black and reds after winning my first two trophies (the Serie A title and the Italian Super Cup) with this shirt.
“I want to contribute to writing Milan’s history and to the future success of this club with happiness and in perfect harmony with the environment.
“Today is a special day for me.
“I thank club president (Silvio) Berlusconi, the club and the supporters who have always believed in me.”
Pato’s current contract with AC Milan is set to expire in the summer of 2014.
