Bakayoko has been pushing for a move to AC Milan after his experience on loan at the San Siro during the 2019/20 campaign.
The Serie A giants have been in talks with his representatives over the last few days and a contractual agreement is in place between the two camps.
AC Milan and Chelsea held talks on Tuesday evening and those negotiations have proven to be decisive.
According to Italian daily Gazzetta dello Sport, a deal in principle is in place between the two clubs for Bakayoko to join AC Milan on loan with an option to buy.
The negotiations between Chelsea and AC Milan will continue as the two clubs look to work out the fine print of the agreement.
Once the deal is finalised, the Frenchman will travel to Italy to complete the formalities of the switch.
Bakayoko has other offers on his table as well but his will has always been to return to AC Milan this summer.
