The 35-year-old – who played Bianca Jackson between 1993 and 2002 – is to walk back into Walford as a single mother with a hoard of children in tow, each with a different father.
Speaking of her return, the actress said: "I'm really excited about rejoining the cast and working with old friends again. I can't wait to explore what Bianca has been doing with her life and seeing what she is going to get up to next."
Executive Producer Diederick Santer added: "I'm delighted to welcome Patsy Palmer home to EastEnders. Bianca is one of the most popular characters the show has ever had. Millions grew up with her."
Patsy begins filming at Borehamwood's Elstree Studios - home of Albert Square - in January and is due to make her screen re-appearance in the spring.
Back in 2005, however, she revealed on This Morning that she would "never go back" as well as branding the show "rubbish" at the time.
A spokeswoman for the Walford soap has denied any plans for Sid Owen - Patsy's former on-screen husband, Ricky Butcher - to return.