Shunsuke Nakamura has agreed to join Espanyol on a two-year contract, subject to a medical examination.
The midfielder, 31 on Wednesday, had been expected to return to Japan with former club Yokohama F. Marinos once his terms at Celtic expired.
However, Nakamura has chosen to extend his stay in Europe with the club who finished 10th in La Liga last season.
He helped Celtic win three league titles during a four-year stay after three seasons with Reggina in Italy.
Nakamura's Celtic contract will expire at the end of June and he is to be paraded as an Espanyol player on 10 July.
The PFA Scotland's player of the year in 2007 helped Celtic to a Scottish Cup success and two League Cup victories as well as three consecutive championship wins.
In May, Yokohama indicated that they were willing to make Nakamura their highest-paid player, with a contract worth £1m per year on offer.
The J-League club wanted to buy him in January but were foiled after club sponsors Nissan suffered financial problems.
Nakamura left Marinos in 2002 for Reggina before his £1.25m switch to Glasgow from Serie A.
"It is a pity that we couldn't sign him," said Marinos president Masaharu Saito.
"But we respect his decision and hope he will have a productive spell in the Spanish league."
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