The two clubs have been locked in transfer negotiations this week, with Romelu Lukaku set to go the other way for an estimated £75 million.
The England striker, 31, left Goodison Park in 2004 for £25.6m and returns for a reported £10m to help fill the void left by Lukaku's departure.
Rooney becomes the latest arrival at Goodison Park in an ambitious summer rebuild by Ronald Koeman, with big-money deals for the likes of Jordan Pickford, Micheal Keane, Davy Klaassen and Sandro Ramirez already wrapped up.
A product of the Toffees’ academy system left for Old Trafford over a decade ago after emerging as one of the most exciting talents in world football.
That reputation was enhanced during a record-breaking spell with the Red Devils which saw him overtake Sir Bobby Charlton as the club’s leading all-time goalscorer – while claiming the same record with England.
Despite all of that success, Rooney found himself slipping down the pecking order under Jose Mourinho in 2016-17 and, with his game time limited, speculation regarding a move elsewhere soon began to surface.
Everton were quick to express their interest in bringing a home-town star back to his roots, and that deal has now been completed.
"Wayne has shown me that ambition that we need and that winning mentality – he knows how to win titles and I’m really happy he’s decided to come home,” Everton manager Ronald Koeman told the official Everton site.
“He loves Everton and he was desperate to come back. He is still only 31 and I don’t have any doubts about his qualities. It’s fantastic he’s here.”