German tabloid Bild said Leverkusen paid 27 million euros to Al-Ittihad to bring Diaby, 27, back to the BayArena.
"When the request came, and the move was possible, I didn't doubt it for a second," Diaby said in a statement, adding, "the club has gotten bigger in the meantime - aiming for titles with Leverkusen is a very big goal of mine."
A fast winger, Diaby scored 31 goals and laid on 37 assists in 125 Bundesliga matches for Leverkusen after joining from Paris Saint-Germain in 2019.
He made his France debut while at Leverkusen and went on to gain 11 caps for the two-time world champions, last playing before the 2024 Euros.
In 2023, Villa paid 55 million euros to bring him to Birmingham but sold him a year later to Saudi side Al Ittihad.
Double winners in 2023-24, Leverkusen were looking to boost their attacking options after missing out on the Champions League last season.
As the summer transfer window ramps up, Flashscore has everything you need to keep up with breaking news, rumours and analysis. Follow our live transfer blog to follow the biggest moves, whilst expert Dean Jones will be on hand to provide the inside stories from around the world.