The news was revealed by Peppers' agent, Carl Carey, who tweeted a picture of Peppers holding his Panthers' jersey at the 2002 NFL draft with these words: "Headed Home..."
Contract terms weren't immediately known as the two sides finalized a contract that would allow the 37-year-old Peppers to finish his career in Charlotte.
The 6-foot-7, 287-pound Peppers played the first eight seasons of his standout career for Carolina and became one of the bigger stars in franchise history. He was NFC Rookie of the Year in 2002, NFL Defensive Player of the Year in 2004 and recorded 81 of his 143.5 career sacks with the Panthers.
Peppers was a five-time Pro Bowl selection for the Panthers. Overall, he is a nine-time Pro Bowler.
Peppers' sack total ranks fifth in NFL history. He has recorded more than 10 sacks in nine different seasons, and had a career-high 14.5 in 2008 for the Panthers.
The pass rusher spent the past three seasons with the Green Bay Packers and totaled 25 sacks. In 2016, he had 8.5 sacks while no longer being a full-time player.
Peppers played for the Chicago Bears from 2010-13 and had 37.5 sacks. He was released after the 2013 season.
Peppers played in 234 NFL games (227 starts) and has 661 tackles, 47 forced fumbles, 18 fumble recoveries and 11 interceptions over 15 seasons. He was a college football star at North Carolina and also played basketball for the school before embarking on his NFL career.
The Panthers later announced the signing of unrestricted free agent safety Mike Adams to a two-year contract.
The 5-11, 205-pound Adams comes to Carolina after three seasons with the Indianapolis Colts (2014-16). He was named to consecutive Pro Bowls in 2014 and 2015 after tying for the league lead with seven takeaways in 2014 and posting five interceptions in 2015.
Undrafted out of the Delaware in 2004, Adams owns 737 tackles, six sacks, 25 interceptions, 74 passes defensed, 11 forced fumbles and 14 fumble recoveries in 190 games (117 starts) over his 13-year NFL career split between San Francisco (2004-06), Cleveland (2007-11), Denver (2012-13) and Indianapolis.
"When you get older, you realize your time is running out. It's time to get that ring," said Adams, who turns 36 later this month. "I just want to win, want to turn over a new leaf and Carolina is the spot."