Milan chief executive Adriano Galliani claimed on Saturday that a deal for the Spanish goalkeeper was "99 per cent done".
A picture on the Serie A club's official website on Tuesday showed Lopez arriving at Milan airport, while a tweet from the club displayed him and fellow new arrival Pablo Armero undergoing medical tests.
Under Carlo Ancelotti, Lopez became Real's first-choice goalkeeper in La Liga last season, with club legend Iker Casillas used in Copa del Rey and UEFA Champions League matches.
However, Keylor Navas' arrival from Levante appears to have pushed Lopez down the pecking order, with the 32-year-old's switch to San Siro confirmed on Wednesday.
"Real Madrid CF and AC Milan have reached an agreement for the transfer of the player Diego Lopez," a brief statement on Real's website read.
"The club wishes to express its appreciation for the dedication and professionalism displayed, and wish him luck in his new career."
