Tevez is still in Argentina, having effectively concluded he has no future at City since the furore over his non-appearance during that infamous Champions League game against Bayern Munich in September.
Inter Milan and Paris Saint-Germain had both expressed an interest in signing Tevez but AC Milan have been front-runners for some considerable time.
On Thursday, when asked if Tevez will join AC Milan, Inter president Massimo Moratti said on the club's official website: "I believe so. That's football."
But within hours, London talks between City and Milan had ended without a deal being concluded.
However, having placed such store by trying to attract Tevez to the club, AC Milan vice president Adriano Galliani is unlikely to just give up when there is so much time left to do a deal.
Inter Milan president Massimo Moratti is now resigned to the fact that Manchester City forward Carlos Tevez will soon join AC Milan.
The Nerazzurri had reportedly agreed a fee with City to acquire the Argentina striker, who reportedly prefers a move to AC Milan.
Reports in Italy claimed AC Milan vice-president Adriano Galliani was travelling to England to counter Inter's bid and land Tevez in the winter transfer market.
When asked if Tevez will join AC Milan, Moratti said on the club's official website: "I believe so.
"That's football."
Inter were willing to sign the 27-year-old Tevez on loan until the end of the season with an option to buy his sporting rights in the summer for 27million euros (£22,569,000).
Tevez, who returned to his homeland in November without City's permission and is yet to report back to training, is under contract with the Blues until June 2014.
