Allegri – who was appointed at Milan in 2010 – has seen his side struggle this term, with the Italian giants sitting 13th in Serie A, 27 points behind leaders Juventus.
The 46-year-old led Milan to the 2010-11 title and Italian Super Cup but has since failed to win a trophy, with an injury crisis this season proving particularly harmful to his side.
And the former Cagliari coach has now revealed that this term will be his last at the helm.
"I can be certain this is my last Christmas at Milan," he told La Gazzetta dello Sport. "But I got there despite many people doubting I'd manage that.
"I leave a good team that earned the love of the fans. A team that with a few adjustments will have a future.
"The real regret is that I never had all the players at my disposal. The first choice full-backs were practically never available at the same time.
"We didn't make mistakes in the medical staff, as we consulted with some of the best specialists in the world and it makes me angry that our doctors are under attack.
"I have always worked with enthusiasm and will continue right to the end. Why am I leaving? I decided the day it was made official I'd remain for one more season. I liked the idea of staying and finishing the job, but four years in one club is a long time.
"I don't know who will be the next Milan coach and it's not my problem."
In an interview with Sky Sport Italia, Allegri admitted that recent times at the club had been "disastrous".
But he is remaining hopeful of a bright end to the season, targeting the UEFA Champions League as a competition that can help him sign off on a high.
"The last four months in Serie A were disastrous," he continued.
"In 2014 we are focusing on a great Champions League campaign. I am confident, even though Sulley Muntari and Riccardo Montolivo will be suspended for the first leg against Atletico Madrid (in the round of 16).
"Plus there is the Coppa Italia to play for and in the league third place (which would bring a Champions League spot) is a long way off, but we'll do everything possible."
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