"In talks with Sarajevo officials, Brega (his nickname) said he intended to return with his family to his hometown where he would continue with his creative career," said a statement from Sarajevo mayor Alija Bahman's office.
Bregovic, 60, is planning to move to Sarajevo with his wife and three daughters, Fena news agency reported.
"This is the first time I am meeting a Sarajevo mayor and I am very happy for that," Bregovic was quoted as saying.
The Sarajevo-born musician and composer rose to international fame and acclaim after producing the soundtrack to Balkan director Emir Kusturica's award-winning 1995 film "Underground".
Such compositions have broadened his appeal beyond the former Yugoslavia and taken Balkan and Roma or gypsy music to an international audience.
Bregovic, who left the former Yugoslavia in 1992, now lives in France and Serbia.
He has been touring the world with his Weddings and Funerals Band, founded in 1997.
