Tim Cahill has left Chinese club Hangzhou Greentown, and could be set for Melbourne City FC.
Cahill, 36, joined Hangzhou in February and scored four goals in 16 appearances for the second-tier club.
The Australian made his name in English football, appearing more than 200 times for both Everton and Millwall.
David Gallop, the chief executive of the Football Federation of Australia, said it was "the right time" for Cahill to play in his home country.
Cahill, Australia's top scorer with 47 goals in 91 games, paid tribute to Hangzhou on Instagram, and revealed he had turned down an "amazing" contract offer to stay.
"This decision is based on me wanting to be with my family," he said. "The passion of the fans at every game, home and away, has been amazing and I've loved being part of it all."
The attacking midfielder started his career at Millwall, scoring 52 goals in 217 games.
Everton paid £1.5m for him in 2004, and he played 226 times for the club in the league, netting 56 times.
In February he described having his contract with Chinese Super League side Shanghai Shenhua terminated as "heartbreaking", before joining Hangzhou a week later.
Gallop said on Thursday that "positive talks" had been held with Cahill about bringing him to Melbourne City.
And newly appointed head of the Australian League, Greg O'Rourke, said the move could help to grow the sport in the country.
"If you're bringing back the Tim Cahills of the world, they can really make a difference in the marketing of this league," he said.