Both players have undergone medicals at their new clubs, the Rossoneri announced on their official website.
Milan paid Inter a fee of around seven million euros as part of the deal, according to reports.
Cassano filed a transfer request as he felt Milan showed a lack of ambition by selling key duo Zlatan Ibrahimovic and Thiago Silva to Paris Saint-Germain.
The Italy forward, 30, has signed on with Inter until the end of the 2013/14 season.
An Inter statement read: "Today is the first day of Antonio Cassano's adventure at Inter. This morning the striker arrived at the Centro Sportivo Angelo Moratti, where Andrea Stramaccioni and captain Javier Zanetti were waiting to welcome him."
The 28-year-old Pazzini, capped by Italy on 24 occasions, struggled for first-tem action under Inter coach Stramaccioni.
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