The French midfielder appeared to be on his way out of the Rossoneri this summer, but might remain with Massimiliano Allegri's men after all if he accepts a pay-cuthere.
AC Milan midfielder Mathieu Flamini could stay with the Italian giants beyond the 2011-12 campaign as the club are ready to offer him a two-year extension to his current contract, La Gazzetta dello Sport reports.
The Frenchman's current deal expires at the end of the season, and there were doubts about whether the Rossoneri were willing to retain the 27-year-old after a disappointing campaign in which he featured just once due to injury.
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However, the former Arsenal midfielder will have to accept a significant pay-cut if he is to stay at the San Siro side.
Flamini is currently on an annual salary of €4.5m (£3.6m), but will earn only a €1.8m (£1.4m) per year under the terms of his new deal if he accepts Milan's offer.
The midfielder joined the club from Arsenal in the summer of 2008, and has since made close to 100 official appearances for the Rossoneri.