Hi Amy,
you can continue to offer milk in the sippy, while still giving the bottle of formula. Then when his intake has increased you can then get rid of the formula OR you don't have to worry about the milk. Toddlers need around 3serves of dairy a day - so as long as you offer other dairy, like cheese, youghurt etc, then you don't need to worry about the milk intake. It is good to start with as a transition to go to whole milk, then it's not such a big change iykwim, but you don't have to.
hth!