Ibrahimović tested positive for COVID-19 last month.
"AC Milan announces that Zlatan Ibrahimović has tested negative to two consecutive swabs," the Rossoneri said in a statement. "The City of Milan Health Authorities have terminated his quarantine."
Milan plays Inter in the Derby della Madonnina on Oct. 17 (stream live at noon ET on ESPN+), in their first match after the international break.
The 39-year-old Ibrahimović scored three goals in Milan's first two matches this season, in the Europa League and Serie A.
However, there was more bad news for AC Milan's opponent Inter, who revealed a further three players on the team have tested for COVID-19, they said on Friday. That takes the total number of Inter players testing positive to five this week.
Under Serie A rules, players who test positive have to quarantine for 14 days, which could leave Inter seriously depleted for their derby against AC Milan on Oct. 17.
AC Milan also had on other recent case in addition to Ibrahimovic in defender Leo Duarte.
Information from Reuters and the Associated Press was used in this story.