The Wales No.9 has signed a two-year-deal to return to the region for next season.
Bridgend-born Webb will leave France at the end of this season and return to Wales in the summer.
The world class scrum-half spent a decade with the Ospreys and will leave France a year early after signing for Toulon in 2017.
“It’s just great to come back where rugby all started for me,” said Webb.
“I am really looking forward to the challenge and fighting for the Ospreys jersey again.
“I have loved my time in Toulon but it’s a relief to come home to the Ospreys, it’s where my family are, where I was brought up, and where rugby all started for me.
“To return to play for my home region again is just really special for me and I am so grateful for the opportunity to be able to do that again.
“I have been away for two years, and I know there have been a lot of changes and that there are a lot of exciting young players coming through and some familiar faces too, I am looking forward to the challenge.
— Ospreys (@ospreys) December 31, 2019
“Hopefully, I can pass on my experience to the younger players and I am determined to do as much as I can to help the team.
“As I said at the time, nobody turns down Toulon and I wanted to experience something different.
“I am thankful that they have released me a year early from my contract and I am as excited about returning to the Ospreys as I was at going to France.
“Everybody knows how important my family is to me and being able to return home, especially to the Ospreys is massive for me.
“I just can’t wait to pull the jersey on again and to run out in front of my fellow Ospreylians.”
Webb made his Ospreys debut off the bench against Ulster back in March of 2008.
He played 154 times for the Ospreys, scoring 39 tries and became a firm favourite with the Ospreys faithful. Webb currently sits 4th on the Ospreys all-time try-scorer list.
“All of us at the Ospreys are delighted that Rhys has decided to come home,” said Andrew Millward, the Ospreys managing director.
“He is a world class scrum-half and has proved that with the Ospreys, Wales, Toulon and the Lions, and to be able to bring him back home is something all of us should be proud of.
“The Ospreys are in his DNA.
“During our discussions with him, it became clear how important the Ospreys were to him and how much he wanted to wear the jersey again.
“His signing is a statement of our intent and ambition to build a squad capable of taking on the best in the Pro14 and in Europe.
“Rhys joins a squad full of experience and brimming with some of the most exciting young talent in Wales.
“And I know how excited he is to play his role in the next chapter of the Ospreys story.”