The Macedonia international spent the 2011-12 campaign on loan at the Partenopei and has now secured a permanent deal
The versatile attacker has signed a contract until June 2015 with his new club, with an option for an additional season.
The 28-year-old spent the 2011-12 campaign on loan at the Stadio San Paolo and made 42 appearances in all competitions for Napoli, scoring seven times in the process.
Napoli were eager to land Pandev on a permanent deal due to the ongoing uncertainty about the future of Edinson Cavani and Ezequiel Lavezzi.
"I am in seventh heaven. I wanted to stay at Napoli at all costs after a year in which I have felt right at home," Pandev commented on his move.
"I have great confidence in this project and I am convinced that the victory in the Coppa Italia final is just the beginning of a golden age for this club. I hope I can end my career at Napoli."
Pandev had joined Inter from Lazio in January 2010, but lost his starting spot after a positive beginning to life with the Nerazzurri, and therefore opted to move on.