Werner was transferred to Chelsea in a deal for £45 million in 2020, after which he officially parted ways with the Bundesliga club.
The Germany international will now return to the club that was his launching pad onto the international stage.
On Sunday, football transfer specialist Fabrizio Romano provided confirmation of this information.
On Twitter, Romano stated, "Leipzig are on the verge of signing Timo Werner from Chelsea, here we go!
"I was promised that it will NOT be a loan but rather a permanent arrangement. Werner is going to go from Chelsea.
Werner is the second striker to leave Stamford Bridge this summer, following Romelu Lukaku's loan return to Inter Milan. Romelu Lukaku left Chelsea to play for Inter Milan.