The 24-year-old spent the 2012-13 campaign on loan at Werder and he has now signed a four-year deal with the Weserstadion side to bring an end to his time with Bayern.
"I have been waiting for this message for quite a while," Petersen was quoted as saying on the official Werder Bremen website. "I am very pleased that everything's panned out like I wanted to. I am very motivated for next season. I want to help the team make a step forward again."
Petersen started his professional career at Carl Zeiss Jena and also wore the jersey of Energie Cottbus before joining Bayern Munich in the summer of 2011.
The striker failed to secure regular first team action with the Bavarians, though, and was consequently shipped out on loan to Bremen.
He netted 11 goals in 35 appearances for Werder this season.