LeBron James, 29, made the announcement in an interview with Sports Illustrated on July 11.
The NBA star has been a free agent since July 1 after opting out of the final two years of his Miami Heat contract.
“I always believed I’d return to Cleveland and finish my career there,” LeBron James said.
LeBron James, named the NBA’s most valuable player on four occasions, quit his contract in Miami last month.
He would have earned $42.7 million in the two years left on his deal.
LeBron James’ decision sparked a scramble for the player, but he revealed a return to his home state of Ohio was always in his thoughts.
“After last season, free agency wasn’t even a thought,” he said James.
“But I have two boys and my wife, Savannah, is pregnant with a girl. I started thinking about what it would be like to raise my family in my home town.
“I looked at other teams, but I wasn’t going to leave Miami for anywhere except Cleveland. The more time passed, the more it felt right. This is what makes me happy.”
After joining the Cavaliers as the first draft pick in 2003, LeBron James rose to superstardom over the next seven years before he was tempted to Miami in 2010, where he formed a devastating partnership with Chris Bosh and Dwyane Wade.
His announcement on leaving for Miami was made during a staged ESPN television show called The Decision.
It led to a backlash from Cleveland fans who burned LeBron James jerseys in anger.
LeBron James, who would have earned $20 million next season, won NBA titles with Heat in 2012 and 2013. He also led Miami to the NBA Finals in 2011, when they lost to Dallas, and 2014, when they were heavily beaten by San Antonio.
News of LeBron James’ departure was announced over the loudspeaker at Cleveland airport and Cavaliers ticket phone lines crashed, reported ESPN.
In 2010, Cavaliers owner Dan Gilbert wrote an open letter criticizing LeBron James and describing his departure as a “shocking act of disloyalty” and a “shameful display of selfishness and betrayal”.
However, on Friday Dan Gilbert tweeted: “My eight-year-old: <<Daddy, does this mean I can finally wear my LeBron jersey, again?> Yes it does, son. Yes it does!”
In Miami, a mural featuring LeBron James was defaced – according to South Florida news station WPLG Local 10.
Heat owner Micky Arison tweeted: “I am shocked and disappointed in today’s news. However I will never forget what LeBron brought us for four years. Thanks for the memories.”
In addition to the Sports Illustrated interview, LeBron James posted a photo of himself in a Cavaliers uniform on Instagram with the phrase: “I’m coming home”.
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