It was widely reported earlier on Tuesday that the 30-year-old South African, who spent the second half of last season on loan at Goodison Park, was having a medical on Merseyside.
Pienaar's permanent return to David Moyes' Everton has now been confirmed only 18 months after he was sold to Tottenham for just £3million.
The midfielder told Everton's official website: "I am happy to be here. It took a few weeks to sort out but I am delighted to be back and excited to play for Everton.
"There was no doubt in my mind that I would be back here. At the end of the season, I told the manager how I felt and I am happy now it is all done."
Pienaar played 14 Premier League games and scored four goals with Everton in 2011/12 and he now becomes Moyes' second summer signing after Steven Naismith.