Tottenham have agreed to sign Mido from Roma, subject to a work permit.
Mido enjoyed a successful spell at Spurs last season
The 23-year-old Egyptian striker spent 18 months on loan at White Hart Lane before going back to Italian club Roma in the summer.
"We've been tracking Mido since his loan ended and we were always keen to bring him back," Spurs boss Martin Jol told the club website.
Mido said: "I'm happy to be back. It was and it always will be a great honour for me to play at Tottenham."
The Egypt forward added: "I always knew in my heart I would be coming back. It's a fantastic move for me, I have some good friends and I will be back with the lads."
Jol said: "Roma took persuading and I'm delighted to have him in the squad. It's an excellent addition to Spurs."
Mido's hopes of landing a permanent deal at the end of last season appeared to be doomed when Spurs refused to meet Roma's asking price of over £5m.
Roma insisted another loan deal for Mido was out of the question and so Spurs had no other option but to consider the full signing of the Egyptian.
He scored 11 times in 27 games for Spurs last season and was a target for both Blackburn and Newcastle during the summer but the striker would prefer a move back to the English capital.
Mido appeared as a substitute in Roma's 4-3 defeat by Inter Milan in the Italian Super Cup on Saturday, but coach Luciano Spalletti was understood to have informed Mido he was not part of his future plans.
Spurs are still waiting to hear if their latest offer for Middlesbrough and England winger Stewart Downing will be accepted.