He will rejoin Guangzhou on an initial six-month loan, with a compulsory purchase option from December 31.
The midfielder was a surprise arrival at Camp Nou last summer, completing a switch towards the end of the transfer window following the sale of Neymar.
He made a bright start to life at Barca, however, and while his form dipped later on he formed a key part of the team that won a domestic double in 2017-18.
In total the Brazilian made 49 appearances for Barcelona, scoring nine goals and adding a further three assists in all competitions.
With the Catalans struggling to accommodate a host of non-European Union players, however, Paulinho has been released back to Guangzhou.
"Welcome back," Guangzhou wrote on their official website alongside a picture of the 29-year-old, who formed part of Brazil's World Cup squad in Russia.
Barcelona also confirmed the sale, wishing Paulinho "the best of luck" for the future.
The player spent almost three years with the Chinese Super League club in his first spell, playing almost 100 games with the giants and lifting back-to-back CSL titles.
Paulinho's exit will open up a spot for compatriot Arthur, who is set to join the Blaugrana from Gremio this summer.