Pirlo's contract was due to expire on June 30 but after an injury plagued season he has agreed to leave the Rossoneri, with Juventus his most likely destination.
"I am here to say goodbye," he told Sky Sport Italia at Milan's Via Turati headquarters. "These were ten unforgettable years and it's a consensual separation. Do I hope Milan will regret losing me? Yes."
The 31-year-old only managed 12 starts in Serie A as Milan wrapped up the Scudetto.
Nesta's deal was also due to expire at the end of June but he has agreed to stay for another year. He joined from Lazio in 2002.
Inzaghi, 37, moved to Milan from Juventus in 2001 and has scored over 120 competitive goals for the club.
"Milan announce that Filippo Inzaghi has extended his contract until June 30, 2012," read a statement on the club's website.