Alexandre Pato attends the AC Milan Christmas Party at the Royal Pavilion at the Central Station on December 14, 2011 in Milan, Italy.

AC Milan's Brazilian forward Pato announced on Thursday that he has rejected the move to Paris St Germain and is staying with AC Milan.

Earlier in the day sources at the French club claimed PSG had reached agreement to sign the 22-year-old.

PSG had offered Pato a three-and-a-half year contract reportedly worth between six and seven million euros a season. However, Milan released a statement detailing the player's intention to stay in Italy.

"Alexandre Pato will stay in the red and black shirt, the striker has decided to continue his young, splendid and winning career with Milan," said the club statement.

Pato, who is dating Milan owner Silvio Berlusconi's daughter Barbara, added: "Milan is my home, I didn't want to interrupt my career in red and black after having won my first two trophies with this shirt."

"I want to help write the story of Milan and contribute to the future success of this club with happiness and in perfect harmony with the whole environment," he said.