"It is the realisation of a dream and a gift for all the Sao Paulo community," club president Juvenal Juvencio told the club's website.
"Luis Fabiano has a 'tricolour' soul and will bring to our team the quality, fun, irreverence and fighting spirit that have always characterised him."
The 30-year-old, who led the line for Brazil at the World Cup finals in South Africa last year, signed a four-year deal with Sao Paulo after becoming unsettled in his sixth season with Sevilla when he lost a regular starting place in the team.
According to Sao Paulo, negotiations to bring Luis Fabiano home went on for more than four months owing to competition from European clubs.
"The striker gave up his annual remuneration, which in Spain is paid at the end of each season, (to help the move go through)," the club said.
"Money isn't everything in life. Nothing pays for the happiness I feel at wearing again the shirt of the team of my heart," Luis Fabiano told the club's website.
'FABULOUS ONE'
The player had agreed a contract extension with Sevilla until 2013 in August but injuries and inconsistency have dogged him this year, although he leaves them as their joint top scorer in La Liga with 10 goals.
Luis Fabiano, who joined Sevilla from Porto in 2005 and went on to score 106 goals for them in all competitions, had become unhappy at being used as a substitute under new coach Gregorio Manzano.
"A great player is leaving who will always be remembered as one of the best players to have worn a Sevilla shirt," the Spanish club said on their website.
"We wish him all the best in this next stage of his career with Sao Paulo, the club where he earned the nickname the 'Fabulous One', which will always be with him."
Earlier this week, Luis Fabiano was ruled out for six weeks with a knee injury picked up in Sevilla's 2-0 defeat at Athletic Bilbao, which left them seventh in the standings.
Luis Fabiano, who helped Sevilla win back-to-back UEFA Cups in 2006 and 2007 and the King's Cup in 2007 and 2010, will be officially presented to the media by Sao Paulo on March 30.
After starting his career with Ponte Preta in 1997, he had a spell with Stade Rennes in France before joining Sao Paulo in 2001 and became one of their most prolific scorers with 118 goals in 160 matches, earning a move to Porto in 2004.
He helped Brazil win the 2004 Copa America and the 2009 Confederations Cup. He was one of Brazil's few successes at the 2010 World Cup finals where they lost to Netherlands in the quarter-finals.
