Diego Costa has reached an agreement with Benfica, according to Mundo Deportivo.
The Portuguese giants tabled an offer of a two-year contract worth £5million for the former Atletico Madrid striker.
Costa left Atletico Madrid by mutual consent in December and has spent the last three months considering his options.
The 32-year-old has now decided to stay on in Europe.
He has turned down an offer by Ligue 1 side, Marseille to join them.
That leaves an exciting chance to return to Portugal, where he previously played for Braga before heading for his first stint at Atletico Madrid in 2007.
Benfica has offered him £2.6m a season to play for them and Costa has agreed to the move in principle.