AC Milan and Inter, owned by US investment funds RedBird and Oaktree respectively, have hired architectural firms Foster + Partners and Manica to work on a new stadium with a capacity of 71,500, part of a broader redevelopment of the area with commercial and residential buildings.
The old ground, which the clubs share, will be demolished except for a heritage section comprising part of its second tier.
Prosecutors in Milan have opened an investigation into alleged bid-rigging in the deal, judicial sources said on Wednesday, following a complaint from another group who said they wanted to make an offer but did not have sufficient time.
The complaint is not expected to block the deal.
Italy is under pressure to upgrade its soccer stadiums, driven by foreign investors backing Serie A clubs and the need for more functional venues for the 2032 European Championship, which it will co-host with Turkey.
Originally built in 1926, the San Siro is Italy's biggest stadium, with a capacity of nearly 76,000. It was renovated for the 1990 World Cup but lacks the facilities offered by other top European soccer venues.
It also hosted live concerts by major international music stars such as Bruce Springsteen, Madonna, and Coldplay.
Under the development project, San Siro, which will host the Winter Olympics opening ceremony in February, will stage AC Milan and Inter matches until the new stadium is ready nearby.
First discussed in 2019, the plan to demolish San Siro and replace it with a modern facility faced opposition from politicians and local citizens' committees, and others who would like to preserve one of the temples of Italian soccer.
The land transaction is backed by financing arranged by Goldman Sachs and JPMorgan as lead coordinators, alongside the clubs' banking partners Banco BPM and BPER Banca, the clubs said.