Carmarthen born Jones, who made over 300 appearances for Llanelli and Scarlets over a 14 year period with the region, will join the Scarlets coaching team ahead of the 2015-16 season as Backs Coach.
Jones embarked on a new challenge in his playing career with a move to Aviva Premiership side Wasps at the end of the 2011-12 season before hanging up his playing boots and taking on a coaching role, as Backs Coach, under the leadership of Director of Rugby Dai Young at Wasps.
A true Scarlet both on and off the pitch Jones' represented the Scarlets when the game first went regional in Wales during 2003-4, after seven years with Llanelli RFC, and returned to his home region ahead of the 2006-07 season after a successful period with Clermont Auvergne.
Jones, Wales' second highest point scorer, will make a welcome return to West Wales where he also has business interests away from rugby, in the shape of gourmet restaurant Sosban and the newly-opened B9-10 tapas bar in Llanelli's Eastgate, with fellow Scarlet Dwayne Peel.
Head Coach Wayne Pivac said: "It is great for the region to be able to welcome back Stephen who'll join the coaching team ahead of the new season.
"A world-class player in his day Stephen has developed into an exciting coach and we're looking forward to welcoming him back to the region to ply his trade as a young backs coach.
"Stephen brings with him a wealth of experience, maturity and commands respect and I'm looking forward to working with him. Having spent the majority of his playing career here in Llanelli and West Wales he has a true understanding of what it means to be a Scarlet that will undoubtedly have a positive effect on our young squad."
Commenting on his move back to West Wales and to the Scarlets Stephen Jones said: "I'm really looking forward to returning to Wales and back to the Scarlets where it all began for me.
"I'm grateful to Dai and all at Wasps for giving me an opportunity to start my coaching career and am relishing the exciting challenges still ahead of us in the Aviva Premiership and in Europe this season. I'm looking forward to then heading back to West Wales and developing further at my home region.
"I have some fantastic memories from my time with Llanelli and the Scarlets, they have made Parc y Scarlets a fortress and have some exciting young players making their way through the ranks.
"After three very enjoyable years in London, the end of the season feels the right time to return home, and going back to the Scarlets, where I enjoyed 14 years as a player, will be a fantastic opportunity for me and my family."
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