The 22-year-old moves to the San Siro on a one-year deal with an option to buy at the end of it.
Hutchinson came through the ranks at Arsenal before joining Chelsea in 2022.
He made just two appearances for the first team at Stamford Bridge and went on loan to Ipswich, eventually making the move permanent.
Last year, Hutchinson joined Premier League outfit Nottingham Forest, where he scored one goal and laid on eight assists in 42 outings in all competitions.
Under former Manchester United manager Ruben Amorim, AC Milan have made a slew of signings this summer, including Goncalo Ramos from Paris Saint-Germain and Diego Moreira from Strasbourg.
