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.