The former Borussia Dortmund man has failed to set the Premier League alight since touching down in England in 2019, and a summer departure seems inevitable.
Lyon and Milan quickly emerged as the two leading contenders for Pulisic's signature, but the attacker apparently has no interest in a move to France at this stage of his career.
With the 24-year-old making his preference known, Milan stepped up their efforts to prise him away from West London and reportedly submitted an improved bid earlier this week.
According to Fabrizio Romano, the Rossoneri and Chelsea have now shaken hands on a fee, and the Blues will receive more than €20m (£17.1m) including performance-related add-ons.
Romano claims that Pulisic already agreed personal terms with Milan last week, and the American has been pushing for a move to San Siro ahead of the 2023-24 season.
Milan are now in the process of scheduling Pulisic's medical, and the "excellent" relationship between Chelsea and Milan was supposedly key to getting a deal over the line.
Pulisic's move to Milan will bring an end to his unremarkable time in the English capital, having signed for Chelsea in January 2019 before being immediately loaned back to Dortmund.
The American hit the ground running with 15 goal contributions in his first 25 Premier League games - nine of his own and six assists - while also netting the opener in his side's FA Cup final defeat to Arsenal in 2020.
However, Pulisic's fortunes soon took a nosedive, and he ended the 2022-23 season with just one goal and two assists to his name from 30 matches across all competitions.
The ex-Dortmund man started just eight Premier League games under several head coaches, while also featuring from the off just once in their Champions League campaign.
Pulisic prepares to depart having amassed a total of 26 goals and 21 assists in 145 appearances for Chelsea, winning the Champions League, Club World Cup and UEFA Super Cup in the process.
Milan have already done business with Chelsea this summer to acquire the services of Ruben Loftus-Cheek - one of nine players to have already waved their goodbyes to the Stamford Bridge faithful.
Mason Mount, Kai Havertz, N'Golo Kante, Tiemoue Bakayoko, Edouard Mendy, Kalidou Koulibaly, Mateo Kovacic and Cesar Azpilicueta have also departed for pastures new, and more are expected to follow in the coming weeks.
Chelsea have supposedly decided to offload Callum Hudson-Odoi permanently, but Hakim Ziyech's transfer to Al-Nassr has apparently collapsed after the Moroccan failed a medical.