The Welsh international, who joined the Chiefs during the summer of 2013 from the Blues, has put pen to paper on a two-year deal and will rejoin the region at the end of the current campaign.
Winger James has to date made 28 appearances for the Aviva Premiership club, scoring five tries in the process, the latest of which came in Exeter's recent European Challenge Cup win at home to La Rochelle.
"I've enjoyed my time at the Chiefs, making not only a lot of good friends, but a lot of memories as well," said James. "I can't speak highly enough of the club and how they have helped to improve me as a player.
"Although I'm leaving at the end of the season, I know I still have a big role to play this season with the Chiefs. We're going well in the league and also in the two cups - and I want to make sure I do my best to help them achieve their goals."
Rhymney-born James first joined Cardiff in 2006 and went onto establish himself as a key member of the Blues squad during his first stint at the Arms Park, where he amassed over 100 appearances, scoed 195 points and won all ten of his international caps.
James added: "Obviously I'll miss everyone associated with the Chiefs - and that includes the supporters - who have been brilliant with me from day one. It wasn't an easy decision to make, but I have a huge affinity with the Blues and at this stage of my career it's a good move for me."