The Dutchman's future has been in question for some time at San Siro and the club have decided to part ways with him and bring in the youth coach as his replacement.
AC Milan have sacked coach Clarence Seedorf and hired Filippo Inzaghi as his replacement.
Dutchman Seedorf was appointed head coach of the Italian giants in January, replacing Massimiliano Allegri at San Siro.
Despite coming close to securing one of Serie A's Europa League spots, the 38-year-old was expected to be relieved of his duties after coming under criticism from president Silvio Berlusconi and chief executive Adriano Galliani.
On Monday the club confirmed that they have parted ways with the former midfielder, who ended his playing days at Botafogo in brazil in order to take up the role.
Inzaghi, 40, has been named as the new first-team coach after a successful spell at the helm of the Under 19 team.
Via a statement on their official website, Milan revealed that the former striker and club legend has been handed a two-year deal.
"AC Milan communicates to have sacked coach Clarence Seedorf and have entrusted the first team, through June 30, 2016, to Filippo Inzaghi," the statement read.
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