"I want to thank the Club for having given me the chance to coach a competitive team and one that is replete with great values, which must never go missing and which make AC Milan special," Pioli said in a statement.
"I'm proud of the work we've done until now, with the good relationship I have with the management, with the growth of my players and with the passion displayed by everyone working at this incredible Club."
The 56-year-old was appointed as the AC Milan head coach in October 2019 after Marco Giampaolo's sacking.
The Rossoneri tasted 59 wins, 27 draws and 20 losses in 106 matches under his supervision.
Collecting four points, third-placed AC Milan are 11 points behind the Group B leaders Liverpool in the UEFA Champions League.
