The move will see Romeo return to his home country for a second spell with the Primera Division side.
San Lorenzo president Rafael Savino announced the agreement, saying: "I have reached an agreement with the officials of Osasuna for bringing back Romeo to San Lorenzo.
"There has been a total understanding with Osasuna. We had to resolve the fact that Romeo was under contract for one more year at Osasuna and fortunately we have been able to do that.
"Next Tuesday we will be signing the contract and that night Romeo will be travelling to Buenos Aires."
Romeo was top scorer in the Argentine top flight with San Lorenzo in 2001, before moving to SV Hamburg a year later. During his three years in the Bundesliga he scored 35 goals in 77 league appearances.
The 29-year-old striker then spent a less successful spell in Spain, first at Real Mallorca and then Osasuna, and he says he would welcome a return to Argentina to link up with coach Ramon Diaz.
Romeo said: "I was hoping for an understanding between both clubs because I am very tempted with the project that Ramon Diaz has for San Lorenzo for the next year, to play the Copa Libertadores."
"I came to Osasuna a few days ago after being on holiday in Argentina because I had to present myself at the club for the pre-season work. But I am very thankful because the officials of Osasuna understood that it's important for me to return to San Lorenzo."