The 29-year-old has already featured in the IMG-Reliance owned league, donning the colours of NorthEast United FC in the 2016 edition.
The Uruguayan hitman was prolific for the Highlanders in the early part of the season before tailing off but still managed to score five goals.
The former Lazio player has now decided to sign for the Pune-based franchise and will wear the orange and purple kit and drive FC Pune City's quest to land the ISL title.
Though not blessed with great technique, Alfaro has a competitive edge to his game and showcases tencaity and commendable opportunism - traits that FC Pune City coach Antonio Habas likes aplenty in his players.
The Indian Super League winner with Atletico de Kolkata in 2014 will be desperate for an upturn in fortunes after failing to lead FC Pune City past the group stages last year and will be hopeful of Alfaro firing on all cylinders in the upcoming season.
Goal contacted FC Pune City officials to corroborate the development but they chose not to comment.