Liverpool have confirmed that they have sold winger Fabio Borini to Sunderland for a fee of £7.75m, rising to £9.75m with add ons.
The Black Cats made a bid to sign the 24-year-old Italy international earlier this month and now have landed their man on a four-year deal.
Borini spent eight months on loan at the Stadium of Light during the 2013-14 season and scored 7 goals in 32 league appearances as they staged a dramatic escape from the threat of relegation.
He said: "I am delighted to be back at Sunderland. It is a club I know really well from my time here previously. It will be emotional for me to play at the Stadium of Light again and I can't wait to get back on the pitch as a Sunderland player."
A Sunderland statement read: "The 24-year-old has signed a four-year deal at the Stadium of Light and returns to the club following a successful loan spell during the 2013-14 season, during which he became a fan favourite with 10 goals including strikes against Newcastle United, Chelsea and at Wembley during the Capital One Cup final."
Former head coach Gus Poyet made Borini his No 1 target last summer, but was unable to persuade him to swap Merseyside for Wearside on a permanent basis.
However, he was unable to force his way into Brendan Rodgers' plans at Anfield - he made just 18 appearances last season and did not figure this - and had been linked with a series of clubs this summer, several of them in his native Italy.
Poyet's successor Dick Advocaat has spent recent weeks urging the club's board to deliver the five or six "quality" summer signings he believes are vital if the club is to avoid yet another scrap for top-flight survival.
Advocaat said: "Fabio is a great addition to the squad who will make our front line stronger. He can play in a number of attacking positions which is a huge benefit to the team."
Meanwhile, Sunderland midfielder Emanuele Giaccherini has joined Serie A side Bologna on a season-long loan deal.
The 30-year-old arrived on Wearside in 2013 from Juventus and made 43 appearances during his two years with the club, scoring on five occasions, but an ankle injury restricted him to only eight league appearances last season; he had not featured this season.