The veteran midfielder is leaving Real Madrid after the Club World Cup.
Now Modric is due to undergo a medical with AC Milan and sign terms.
Transfer expert Fabrizio Romano is reporting: "Luka Modrić to undergo medical and complete formal steps of AC Milan move after the Club World Cup.
"No signature/official steps before that as Modrić wants to focus on Real Madrid at the best level possible until the end."
Modric, 39, is eager to remain in Europe as he targets next year's World Cup with Croatia.