The 34-year-old rejoins the club that he left to become boss of the Clarets in December 2010, when he replaced the sacked Brian Laws.
Howe has made the decision to return to Dean Court and drop down a division due to personal reasons and insists that it is only due to lure of Bournemouth, who are currently 21st in League One, that he has decided to call time on his spell in Lancashire.
"It’s been a really tough week," he told Burnley's official website. "I can't speak highly enough of Burnley FC, the people who work for the club, the players and the supporters, who have all been brilliant to us since we walked through the door, and I would like to thank them for that.
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"To leave is incredibly difficult, but I feel it's a decision I have to make for my family and for personal reasons, which I can't go into detail on.
"There is only one club I would contemplate leaving Burnley for and that is Bournemouth and that is the situation we found ourselves in."
Howe will be joined at Dean Court by his assistant, Jason Tindall, who is also leaving the Clarets but the 34-year-old feels that he is leaving the club in good shape to move forward and in a better situation than he arrived.
"Jason and I have worked extremely hard in the job to try and put foundations and processes in place that will benefit Burnley for the long term and hopefully they will continue to go on behind the scenes because I do believe the future is really bright for the club," the manager added.
"When we arrived we knew it was going to be a long-term job, in that there were going to be massive changes in terms of lowering the age of the squad, reducing the wage bill and it was almost a fresh start.
"We had to approach it from a totally different angle and we enjoyed that approach. I felt we were on the right road and it's a shame not to see that through.
"There is a really good youth setup and the training ground is greatly improved, so I think everything is in place for a successful period in Burnley's future. It's just someone else who is going to take that on now.
"But that's football, that's how it goes and you can never tell what's round the corner and what's going to happen. Now we have to move on to a different chapter and it’s one we are looking forward to."