Real Madrid paid 30 million euros ($33 million) for a buyback option to re-sign 23-year-old Morata from Italian champions Juventus, with whom the Spaniard played for two seasons.
Morata scored 27 goals in 93 appearances for Turin-based Juventus.
"It's a very happy day for me as I return home," said Morata, thanking his family, friends and all the people who have always trusted him.
"They were two long years, but sometime you have to mature and I'm here again to give my all and to try to stay as long as possible," he said according to the club official website.
Before his appearance, Morata signed his contract with Perez in the boardroom. The president gave his player a Santiago Bernabeu miniature and a watch that he wore before posing for the cameras with his No.21 shirt, reports Efe.
"These are happy days for Madridismo because we have just won a new European title and we now have with us one of the best forwards in the world. On top of that, someone who knows and has lived since a child, the true Real Madrid," Perez said.
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