Financial details were not disclosed but British media reported that the Italian club had paid Chelsea 20 million euros ($22.41 million) plus add-ons for the player.
Pulisic has spent four seasons at Chelsea, making 145 appearances, scoring 26 goals and providing 21 assists.
He helped Chelsea win the Champions League, UEFA Super Cup and Club World Cup in 2021.
Pulisic joins a long list of players who have left Chelsea after they finished 12th in the Premier League last season, their lowest finish in nearly three decades.
"The last few seasons with Chelsea were difficult," Pulisic told a press conference after being unveiled by Milan.
"For whatever reason, I wasn’t getting the opportunities I wanted at my previous club, but I now have a great opportunity to reach the highest level that I can..."
Pulisic will wear the number 11 shirt, worn by Zlatan Ibrahimovic, and acknowledged the weight of responsibility that comes with it following the Swede's retirement.
"I’m not trying to fill his shoes, he’s a legend, but it was a fresh beginning and a number that I liked," Pulisic said.
"There are so many big names you can go through, but I am a bit younger, so watched the likes of Kaka and Ibrahimovic, plus the players who are here now."
Milan came fourth in Serie A last term to qualify for the Champions League.
He becomes the second player to leave the west London club for Milan after midfielder Ruben Loftus-Cheek.
Pulisic is Milan manager Stefano Pioli's fourth close-season signing after back-up goalkeeper Marco Sportiello from Atalanta, teenage forward Luka Romero from Lazio and Loftus-Cheek.
