Gibbons spent parts of five seasons as Toronto's manager from 2004-08 and will once again assume that role, replacing John Farrell, who left last month for the Red Sox.
The 50-year-old Gibbons received a two-year contract as part of the homecoming, but the financial terms were not disclosed by the club.
"This came as a big surprise to me," Gibbons said during a news conference on Tuesday morning. "I'm really thrilled, and it's an honor to be back. I never could have guessed this would have happened.
"Ever since I left five years ago, I've been following the team because I have a lot of friends here that I care about and I'm always rooting for this organization. They gave me my first shot at being a big league coach and a big league manager."
Toronto's search for Farrell's replacement began in late October, but it wasn't until last week that general manager Alex Anthopoulos reached out to Gibbons. Once the dialogue had been initiated, everything else came together rather quickly.
Gibbons arrived in Toronto over the weekend for in-person negotiations with the Blue Jays' front office. He then went out for dinner with Anthopoulos on Sunday night to go over the inner workings of the club. The new contract was finalized late Monday night.
In some ways, the decision to hire Gibbons came as a complete surprise. He hadn't been mentioned as a candidate during the month-long search and had been somewhat off the Major League radar after spending the past season managing San Diego's Double-A affiliate in San Antonio.
But none of that mattered to Anthopoulos. Once the fourth-year GM began to think about the qualities he was looking for in a new manager, he kept going back to Gibbons. The two became close while working for then GM J.P. Ricciardi, and their rapport ultimately led to the return of the former skipper.
"From my standpoint, I don't know that there was anybody better in terms of managing a bullpen, connecting with players, connecting with the front office, holding players accountable -- really everything you want from a manager," Anthopoulos said. "I don't know that there's anybody better to manage a team. I've got more conviction in this hire than any transaction we've made here."
The hiring of Gibbons came just one day after the club officially announced its blockbuster 12-player trade with Miami and the signing of free agent Melky Cabrera. The influx of talent -- which includes the likes of Jose Reyes, Mark Buehrle and Josh Johnson -- has re-energized the fan base and created renewed aspirations for the postseason.
It's somewhat of a similar situation to the one Gibbons was faced with in 2006. The Blue Jays were fresh off the signings of A.J. Burnett and B.J. Ryan to lucrative multiyear contracts while also pulling off trades for Troy Glaus and Lyle Overbay.
Toronto went on to win 87 games that season, but Gibbons' club still finished a distant second to New York in the American League East. Even though that would mark the highest win total of Gibbons' managerial career, he believes this current squad is better equipped to make a run because of its starting pitching and versatile offense.
"They invested a lot in this ballclub, especially the last couple of weeks," Gibbons said. "So it's really important they get the right guy, and to go out on a limb and bring back an individual who was here just a few years ago is a big thing for them.
"It's not easy to do, I know it wasn't an easy decision for Alex. There were so many qualified individuals out there, some up-and-coming coaches, some fresh faces, if you will. But when it's all said and done, I think I fit the characteristics he was looking for, so I'm glad he made that choice."
Toronto was forced to begin searching for a new manager after the season, when Farrell asked the club for permission to go after his "dream job" in Boston. Farrell's decision appeared to catch the organization off-guard, even though he made a similar request following the 2011 season but was ultimately denied a chance to leave.
Anthopoulos said at the time the search wouldn't drag on like it did in 2010, when Farrell was hired on Oct. 25. But the search for a manager eventually took a backseat because of Anthopoulos' eventful start to the offseason.
"I was never in a rush for the manager search because we had so much other work to do with the roster," Anthopoulos said. "I was very cognizant and leery of being overwhelmed or focusing too much on the manager search early in the offseason and neglecting the roster.
"We could have the best manager in the game, and if I don't give him the players as a general manager, it won't matter. The window of opportunity to make some trades, sign some players, that had to be the focus on keeping an eye on the manager search."
Anthopoulos might not have begun talking to Gibbons until last week, but all along he was prepared to offer a veteran manager a second chance. The 35-year-old GM felt hiring a manager with previous experience would come with fewer question marks about his overall style while also providing an opportunity to correct previous mistakes.
That led to plenty of speculation the Blue Jays would go after the likes of Manny Acta, Jim Tracy and Jim Riggleman. Toronto even reached out to Bobby Cox, who informed the club he had no intention of leaving retirement.
In the end, it's Gibbons who winds up with the job. He fits into what Anthopoulos was looking for in a manager and has garnered a lot of praise in the past for his ability to manage a bullpen.
Gibbons is considered a players' manager but has never been afraid to step in when someone appears to get out of line, which is something the club could sorely use following a disappointing end to the 2012 campaign. In the public eye, Gibbons might walk a fine line, but he always been highly regarded by almost all of his ballplayers.
"Players love playing for him," Anthopoulos said. "They'd go through a wall for him. They respected him. He had the respect of the guys in the clubhouse, he never lost that. He connected incredibly well with the front office. From that standpoint, he was a perfect fit."