The Senegal international moved to Ligue 1 last season from Lazio but has decided to return back to the Serie A.
The 23-year-old scored eight goals in 33 appearances for AS Monaco as they finished second in the league last season.
"The forward Keita Balde Diao is a new Nerazzurri player," a statement on the club's website wrote.
"The Senegalese has signed for Inter from Monaco on a year-long loan with an option to make the deal permanent.
"Born on 8 March 1995 in Girona, Spain to Senegalese parents, he joined the Barcelona youth system in 2004.
"For Senegal, he made his debut on 26 March 2016.
"He currently has 20 international caps and three goals to his name and he played for Senegal at the 2017 Africa Cup of Nations and the recent 2018 World Cup in Russia.
"It’s now time for a return to Italy and an exciting new adventure with Inter.
"Welcome Keita, and best of luck for this adventure with the Nerazzurri!"
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