The 33-year-old striker failed to settle at Inter after joining the Italian club from Atletico Madrid last summer and is now expected to take up residence in Porto Alegre
The veteran forward only moved to the Nerazzurri last summer from Atletico Madrid and still has a year to run on his current contract with the Serie A side, but he struggled for both form and fitness last season.
Forlan has been linked with a surprise switch to Inter's city rivals AC Milan in recent days but has now all but confirmed that he is bound for Brazil.
"After 14 years spent playing football around the world, for me to be able to play for a team close to my country, Uruguay, is something that makes me very happy," the former Manchester United striker told Tele Doce.
Forlan netted just two goals in 18 league appearances for Inter during his debut campaign in Italy.