He was in Paris on Tuesday and, when he heard PSG had rejected Chelsea's interest in him, he sought out both PSG's president Nasser Al-Khelaifi and their sporting director - his fellow countryman Leonardo - in an attempt to convince them to let him go.
Luiz said: "I'm delighted to return to Chelsea. We had a fantastic story during my first time at the club and I want to help the team and Antonio Conte achieve a lot of success.
"I always had a wonderful relationship with the fans and I am looking forward to wearing the blue shirt at Stamford Bridge once again."
PSG had previously turned down approaches from Chelsea for both Luiz and his Brazilian team-mate Marquinhos, telling them that neither defender was for sale.
But a Chelsea statement on Wednesday evening read: "Chelsea Football Club and Paris Saint-Germain have agreed terms for the transfer of David Luiz back to London."
The 29-year-old Brazilian left Stamford Bridge for France two years ago for £50m, which remains a world record fee for a defender.
Chelsea first purchased Luiz in January 2011 from Benfica for £21m.
In his three-year stay in west London, Luiz made 143 appearances for Chelsea in all competitions, scoring 12 goals.
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