The Argentine midfielder has gone back to the club that he started his career after spending the tail end of last season on loan at Valencia.
The 27-year-old made the move to Mestalla last summer after falling out of favor at Real Madrid, but struggled to secure a first-team spot.
He spent the second half of last term back in Argentina with Velez Sarsfield and has now sealed a permanent return to his homeland with the club where he began his professional career.
"It's a nice feeling coming back to the club where I grew up as a person and now I want to enjoy this stage at Boca," he is quoted as saying by AS.
"Boca always want to be [title] candidates, that's the goal. We have the obligation to fight for the title."
Gago left La Bombonera back in 2007 and spent a total of four years at the Santiago Bernabeu, first leaving the club for Roma on loan before sealing a permanent switch to Valencia a year ago.
However, he made just 13 Liga appearances for los Che before returning to his homeland on a temporary basis.