The 34 year-old Bulgarian was a free agent after leaving Monaco in the summer and reports had linked him with a deadline-day switch to Aston Villa.
But he has instead committed to Superleague outfit PAOK, which is home to former Sydney FC star Terry Antonis, until June 30, 2016.
A statement published on paokfc.gr confirmed the two-time Barclays Premier League winner's arrival in Salonica.
Berbatov arrived in England in 2006, leaving Bayer Leverkusen to join Spurs for $23.7 million.
A $67 million transfer to Manchester United followed and he scored 48 league goals in four seasons with the Red Devils.
After leaving Old Trafford, the 78-cap Bulgaria international returned to London with Fulham before spending the 2014-2015 campaign with Ligue 1 team Monaco.
His new club PAOK is yet to win in the Superleague this term and is 12th on the table.