Lacazette has signed a three-year contract at the Groupama stadium until the summer of 2025.
The 31-year-old's contract at the Emirates Stadium would have expired at the end of June but he had already announced that he was leaving Mikel Arteta's side.
Lacazette joined Arsenal from Lyon in the summer of 2017 for a transfer fee that eventually rose to £53m and scored 71 goals in 206 games, winning the FA Cup in 2020.
He only scored four Premier League goals last season as Arsenal missed out on Champions League qualification.
Despite leaving Lyon five years ago, Lacazette sits fourth on the club's all-time top scorers list with 129 goals in 275 games from his first spell at the club.
“Olympique Lyonnais are very proud and very happy to announce the return to the club of Alexandre Lacazette, a product of the club's academy, for the next three seasons,” read a statement on the club’s website.
"The return to OL of Alexandre Lacazette has been the club's priority for several months and is perfectly in line with the new strategy now set up within the institution."
“Out of contract at English club Arsenal, the French international has signed a three-year deal through June 30, 2025.
"Having transferred in July 2017 to Arsenal for the record sum of €60M (including bonuses), Alexandre Lacazette, at 31, has made the choice to return to the club which has seen him grow and become one of the greatest strikers in its history, despite offers from many major European clubs in recent weeks."
