Balotelli handed three-match ban
The 23-year-old was booked in the 57th minute before being shown a second yellow card for dissent after the final whistle of his side's 2-1 defeat at San Siro.
Being dismissed for two bookable offences carries a mandatory one-match suspension, but the Italian league has opted to extend Balotelli's punishment for "directing insulting and intimidating expressions to the referee at the time of the sending-off", it confirmed in a statement.
Balotelli had a typically eventful game against Rafael Benitez's side, as he missed the first penalty of his career and hit the bar before scoring a sublime injury-time consolation and getting sent off.
The Italy international, who has scored three goals in four Serie A games this season, will now miss Milan's fixtures against Bologna, Sampdoria and champions Juventus.