Edu has returned to Arsenal to become the club's first technical director.
The 41-year-old played for the Gunners between 2001 and 2005 and formed part of Arsene Wenger's unbeaten 'Invincibles' Premier League champions of 2004.
It was announced on Tuesday that the former Brazil midfielder would take on the new role at the Emirates Stadium.
"In his role as technical director, Edu will coordinate the work of our first-team coaching group, the academy and player scouting and recruitment in order to oversee the constant building up and efficient strengthening of our squad," Arsenal said in the statement confirming the deal.
Edu made 127 appearances for Arsenal and scored 12 goals and would go on to play under current Gunners head coach Unai Emery at Valencia.
He will link up with Emery and his players later this week when they travel to the United States to begin their pre-season tour after leaving a similar role with the Brazil national side following their Copa America success.
"Arsenal has always had a special place in my heart and I'm thrilled to be returning to this great club in this new role," he said.
"We have a strong squad and some very talented young players with fantastic people at every level. I'm looking forward to helping make a difference."
Edu lifted two Premier League titles and two FA Cup trophies during his time in north London and also has previous experience of working in a technical role at Corinthians.
It is believed he played a role in helping Arsenal land the signing of highly-rated Brazilian forward Gabriel Martinelli, the 18-year-old arriving from Ituano last week.
And there could be more transfer activity from the club in the coming days, with reports suggesting a deal for Saint-Etienne defender William Saliba is close to completion.
The 18-year-old Frenchman is expected to be loaned back to the Ligue 1 side for next season after signing for a reported €30million and is seen as a long-term prospect by the powers that be at Arsenal.