The former World Player of the Year has struggled to produce his best in Madrid, and is now deemed surplus to requirements.
Kaka spent six memorable years at Giuseppe Meazza prior to making a big-money switch to Spain in 2009.
Milan have expressed an interest in his services in the past, but have been unable to put an agreement in place.
They are hoping for a more positive outcome this time around, with a loan offer having been put to Real president Florentino Perez by his Milan counterpart Silvio Berlusconi.
Milan's TV station, Milan Channel, have revealed that negotiations are underway, with Kaka having declared on Wednesday during a visit to Italy that he would be open to a move.
He told Sky Italia: "To come back to Milan, I am ready to do anything.
"It's not a good situation for me at Real Madrid. I have already asked Milan to find a solution because during my time with Milan I enjoyed some of the best moments of my life."