Balotelli signed for the Reds for £16million from Milan in the summer of 2014 but was underwhelming during his first season at the club - scoring just four goals in all competitions.
He told Sport Mediaset Premium: "I want to stay at Milan. I do not want to return to Liverpool. I was never happy at Liverpool. Plus Milan have the money."
Balotelli added that he still has six games to convince those at the San Siro that he is worth re-signing on a permanent deal.
The 25-year-old was out of favour for much of last season, as it seemed that he was not the desired choice of then manager Brendan Rodgers - who opted to play Raheem Sterling up front in his place when Liverpool were without Daniel Sturridge.
One doubts that there will be many tears shed on the part of Liverpool fans if his loan move becomes a permanent one, and it will be one less thing for manager Jurgen Klopp to contend with. It is highly doubtful that the German will have wanted to put up with the Italian's attitude given the high pressing game that his side undertakes, and given he has one forward who does not seem to be firing under his current regime in the form of Christian Benteke.
It is just a question of how much Liverpool can recoup from one of their worst transfers in recent memory. Balotelli may still be highly rated in Italy and they will hope he can show some good form during the closing stages of the season in order to get him off their books.
So far he has only managed to score three goals in 20 appearances but he played the entire 90 minutes of yesterday's 1-0 win over Sampdoria - the first game under new boss Cristian Brocchi.