"Cagliari Calcio are pleased to announce the signing of Diego Godin from Inter," the Sardinian club said in a statement.
"The Uruguayan defender has signed an agreement that ties him to the Rossoblu until June 30, 2023."
Godin, 34, joined Inter Milan in 2019 after nine seasons with Atletico Madrid where he was captain and won La Liga in 2014 and two Europa League titles in 2012 and 2018.
"Inter Milan can confirm that defender Diego Godin has signed for Cagliari Calcio on a permanent basis," Inter said in a statement.
"The Club would like to thank the player for the professionalism and commitment he displayed during his time with the Nerazzurri and wishes him all the best as he begins the next stage of his professional career."
Godlin played 36 games for Inter last season helping the team reach the Europa League final, where he scored a goal.
He has played 135 times for Uruguay and scored eight goals.