The French World Cup winner had a woefully unsuccessful spell at Liverpool and was glad to finally be released from his Anfield contract.
The 29-year-old spent part of last season at Ajaccio and has decided to extend his stay on Corsica for another season.
The former Auxerre man was keen to avoid a scramble for a new club during the summer and has settled on Ajaccio as the place to try and resurrect his career.
Diomede hardly got a sniff of a first-team chance under Gerard Houllier and had no option but to leave Merseyside.
He played 15 games for Ajaccio last term after arriving in January, and scored twice.
He will now be hoping to impress bigger clubs in a full season back in Le Championnat.
