Ariane Lak - who claims to be a descendant of the Qajar monarchy in Iran - was found sleeping rough in a busy shopping area in the Italian city by a private detective hired by her wealthy family, according to Italian media.
The 50-year-old Iranian-born British citizen and Cambridge University graduate was last seen at a hotel in Milan before she disappeared.
Italian media broke the news today that a woman called Ariane, who is reportedly fluent in four languages, had been discovered in Milan's Piazza Cesare Beccaria in a confused state, near the city's cathedral.
Ariane vanished in March
They describe her as "a very well-paid film production company manager thought to be a millionaire".
She is understood to be the same Ariane Lak reported missing by her family via the Lucie Blackman Trust - which supports British victims overseas.
The Trust posted on Facebook last week: "Ariane is still missing in Milan. Have you seen her? Can you help?"
It also said her family have not heard about her since a relative spoke with staff where she was staying at in January last year - but Le Matin reports today that her family were informed of her discovery two days ago.
Ariane was found on the streets in Milan, Milan Cathedral pictured
An online missing persons appeal for Ariane Lak posted last year reads: "50 year old Ariane was staying at a hotel Residence Di Coro/Di Corso in Milan, Italy.
"A family member spoke to the hotel on 06/01/2016 and confirmed that the hotel was closing down and that Ariane had moved to a hotel nearby.
"Ariane has not been heard from since. Her family are very concerned for her welfare. She is around 5ft 4ins tall, of slim build, with shoulder length brown hair."
Italian media reports today that British police had not become involved since the disappearance took place abroad.
It is not known if Italian police were involved in the search for her either.
Inside the Galleria Vittorio Emanuele II in Milan
Italian media said that an unnamed detective, who worked as a policeman in Albania, asked about Ariane in Milan and showed people her picture.
Homeless people said they had seen her sleeping rough while a hairdresser revealed Ariane was his customer. He described her as "dirty".
When the detective found Ariane, he summoned her sister to Milan to help her.
Ariane appeared to have suffered memory loss and confusion. She claimed she was violently robbed in the city.
She was quoted as saying: "I cannot explain... Maybe I was walking, I was assaulted and robbed, and I fell to the ground I hit my head.
"I'm in love with Milan. Residents, passers-by and volunteers offered help but I did not want to... I refused.
"They gave me food and I was refusing... I was rummaging in bins, trying to eat, I was standing in front of restaurants and hotels so I could eat something."
Ariane's whereabouts and condition now have not been reported - and the investigation is said to be ongoing.
Mirror Online have approached the Foreign Office and the Lucie Blackman Trust for comment.
Ariane Lak's Facebook page claims that "the princess is a descendant of the Qajari Monarchy. With a Franco-Caucasian bloodline, she is, apart from the Aryan Princess also the Royal Highness of Caucasia and a Frank Princess to Europe".
It continues: "She has won 12 Acting Awards including awards from the Royal Shakespeare Company and the National Theatre for Acting at the Gloucester Festival and she has also won awards from the Acadamie Francaise."