The 29-year-old spent last season on loan at Inter, making 28 Serie A appearances, and has reportedly been monitored by the likes of Cagliari, Sunderland and Fulham in recent weeks.
Gargano, capped 47 times for Uruguay, joined Napoli in 2007 from Danubio and helped the club to win the 2011-12 Coppa Italia.
He played 199 games for Napoli and will now continue his Serie A career at Parma.
Gargano was initially linked with Parma at the start of last month after Inter opted not to offer him a prolonged stay at San Siro despite the player admitting an interest in remaining in Milan.
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