The NBA's biggest star made the announcement in a first-person essay published in Sports Illustrated. It came in stark contrast to his televised decision four years ago for which he was heavily criticized.
Under a banner headline "I'm Coming Home", James explained his decision to go back to Cleveland after leading a star-studded Miami Heat team to two NBA championships and four Eastern Conference titles.
"Before anyone ever cared where I would play basketball, I was a kid from Northeast Ohio. It's where I walked. It's where I ran. It's where I cried. It's where I bled. It holds a special place in my heart. People there have seen me grow up," James wrote.
Factbox: LeBron James returning to Cleveland
11/07/2014 AT 17:05
"I sometimes feel like I'm their son. Their passion can be overwhelming. But it drives me. I want to give them hope when I can. I want to inspire them when I can. My relationship with Northeast Ohio is bigger than basketball. I didn't realize that four years ago. I do now."
Along with nestling back among his fellow Ohioans, James will be warmed by a contract worth a reported $88 million for four years, according to ESPN.
The Heat, Phoenix Suns, Houston Rockets, Dallas Mavericks and Los Angeles Lakers were among teams that had expressed interest in signing James, widely regarded as the best basketball player on the planet.
The frenzy over the 29-year-old forward's eventual landing spot was the biggest the NBA had seen since James, Dwyane Wade and Chris Bosh all signed contracts to team up in Miami in 2010.
James, who was on the losing end of a humbling five-game defeat by the San Antonio Spurs in last month's NBA Finals, opted out of the final two years of his contract with Miami to become a free agent who could negotiate with any team.
"These past four years helped raise me into who I am. I became a better player and a better man," James, who grew up in Akron, Ohio, said about his time with the Heat.
"I will always think of Miami as my second home. Without the experiences I had there, I wouldn't be able to do what I'm doing today."
Plain Dealer front page
Heat owner Micky Arison was crushed.
"I am shocked and disappointed at today's news. However I will never forget what Lebron brought us for 4 years. Thanks for memories @KingJames," Arison said on Twitter.
Meanwhile, euphoria reigned in Cleveland.
Taxis honked their horns and fans cheered across Cleveland as news of the return of the Ohio native spread.
"Welcome Home @kingjames," tweeted Cavaliers owner Dan Gilbert. "I am excited for the fans and people of Cleveland and Ohio. No fans and people deserve a winner more than them....."
No Cleveland team has won a major professional league title in 50 years since the 1964 Browns won the National Football League crown.
That could all be changing soon with the return of James, who took an overmatched Cavaliers team to the NBA Finals in 2007 when they were swept by San Antonio.
The addition of James to a young roster featuring premier point guard Kyrie Irving, 22, and last month's overall number one draft pick Andrew Wiggins, 19, is expected to shift the balance of power in the NBA and bookmakers reacted swiftly.
Cleveland, which has never won an NBA title in 44 years of existence and was 33-49 last season, was listed as 4-1 favorite to win next season's NBA title, with San Antonio rated 5-1 while Miami blew out to odds of 50-1.
James, a 10-time NBA All-Star who was drafted first overall by Cleveland in 2003, has averaged 27.5 points, 7.2 rebounds and 6.9 assists per game in 11 NBA seasons.
"When I left Cleveland, I was on a mission. I was seeking championships, and we won two," James said.
"Our city hasn't had that feeling in a long, long, long time. My goal is still to win as many titles as possible, no question. But what's most important for me is bringing one trophy back to Northeast Ohio."
The Cavaliers cleared salary cap room this week to accommodate James by trading Jarrett Jack and Sergey Karasev to the Brooklyn Nets and Tyler Zeller and a future first-round draft pick to the Boston Celtics earlier this week.
Before heading back to the home he keeps in Akron, about a 45-minute drive from Cleveland, James, a soccer fan, was taking off for Brazil to watch Sunday's World Cup Final between Germany and Argentina.
James stopped short of guaranteeing a Cavaliers title, but heartily accepted the mission.
"In Northeast Ohio, nothing is given. Everything is earned. You work for what you have," said James.
"I'm ready to accept the challenge. I'm coming home."

LeBron James Sports Illustrated

Image credit: Eurosport

Kevin Durant out indefinitely with foot injury
21/03/2015 AT 07:33
LeBron's Cavaliers offer Wiggins for Love
18/07/2014 AT 23:38