Livescores.com
The Spain international had fallen out of favour with Blues boss Antonio Conte in the new year, and was made surplus to requirements despite firing them to the Premier League title last season.
Costa had held out for a move back to Atletico during the recent transfer window, but it failed to materialise after the Court of Arbitration for Sport upheld their transfer ban.
The 28-year-old striker was frozen out by Conte at the start of the new campaign, and the two clubs finally reached an agreement on a £58 million deal last week.
Costa subsequently agreed personal terms at the Wanda Metropolitano and completed a medical ahead of re-signing for Diego Simeone's side.
He will join his new team-mates for training this week, but is prevented from playing for Los Colchoneros until January.
"I'm very happy to return home, I've always said it, Atletico is my home, I'm very, very happy," Costa told the La Liga club's official website.
"I'm looking forward to start contributing. I'm going to give my all for the team, as I always try to do."
Speaking in his pre-match press conference ahead of his side's UEFA Champions League clash with Atleti on Wednesday, Conte said: "Yes, as I said before, I have no problem with Diego Costa.
"I said that we wish, for him, the best for the future. We want to thank him for the last season. But, I repeat, I have no problem with him."
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