The midfielder impressed with his performances on loan at AC Milan from Chelsea last season and a number of clubs have looked into his availability.
Milan said on Sunday that Biglia signed a contract through 2020.
Milan is also concluding a big deal for Juventus defender Leonardo Bonucci, having already signed Andre Silva from Porto, Ricardo Rodriguez (Wolfsburg), Franck Kessie and Andrea Conti (Atalanta), Hakan Calhanoglu (Bayer Leverkusen) and Mateo Musacchio (Villarreal).
Biglia scored five goals with four assists in 34 appearances across all competitions last season.
The 31-year-old Biglia spent the past four seasons at Serie A club Lazio, reports Efe.
Lazio have made a loan offer with option to buy.