Grabban faced disciplinary action from Norwich at the time for failing to show up for the club's Capital One (League) Cup victory at Rotherham United in August despite being named on the bench.
The Cherries' manager has finally got his man for a fee reported by British media to be in the region of 8 million pounds ($11.6 million).
He joins Wolverhampton Wanderers striker and Arsenal youth product Benik Afobe, who Bournemouth signed on a four-and-a-half year deal on Sunday.
"We're really pleased to be bringing Grabbs back to Bournemouth," Howe told the club's website (www.afcb.co.uk).
"It was such a long drawn out transfer but we're delighted it's been done.
"I think we'll be getting a better Lewis Grabban, but he'll realise that we've got better as well and he will have to adapt too. But we're in no doubt we're getting a good player back."
Grabban scored 35 Premier League goals during his time at Bournemouth, who have the worst goal difference of any side outside the bottom three this season.
Afobe, who was unveiled on Monday, has been tipped by former manager Arsene Wenger to succeed at the south coast club.
"He has the qualities to integrate into a team like Bournemouth, whose game is based on movement, pace and quick football," Wenger said.
"I must say I am very happy for Benik because he had an outstanding attitude here and I am very pleased he has done well."
(Reporting by Simon Jennings in Bengaluru; editing by Amlan Chakraborty)
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