Striker Suarez, 35, left Atletico Madrid at the end of last season and is looking for a new club.
He is Uruguay’s all-time top goalscorer and set to compete at his fourth World Cup.
“First of all I would like to say thank you for the great affection shown to me and my family these last few days,” said Suarez in a video published on his social media accounts.
He said this had made it impossible “to reject the possibility of returning to play for Nacional and we have a preliminary agreement with the club.”
Suarez began his career at Nacional, making his debut aged 18 in May 2005.
After one full season he moved to Groningen in the Netherlands and then on to Ajax a year later.
There he caught the eye of Liverpool and after three and a half seasons in England he moved to Barcelona for a fee worth more than 80 million euros.
He enjoyed his most successful spell in Catalonia, winning four Spanish league titles and the Champions League in 2015, while he won La Liga again with Atletico in 2021.
He earned notoriety at the 2010 World Cup in South Africa when his last gasp illegal goalline clearance in the quarter-finals against Ghana prevented the Black Stars from becoming the first ever African nation to reach the last four of the tournament.
Suarez was sent off for deliberate handball but Uruguay survived the subsequent spot-kick and then progressed on penalties.
Four years later in Brazil he disgraced himself by biting Italy’s Giorgio Chiellini, for which he received a record nine-match ban from world football governing body FIFA — it was the third time he had bitten an opposing player.
He is due to sign a three-month deal with Nacional to play in the Uruguayan Clausura competition while preparing for the World Cup in Qatar from February 21 to December 18.
“Details will be finalized in the next hours and we hope to reach the agreement we all desire and that we can all make the most of this new stage and see each other in the coming days,” added Suarez.