The Coventry-born forward, 27, came through the ranks at his hometown club and enjoyed a successful spell with the Sky Blues before being snapped up by Birmingham in 2006.
He continued his scoring touch at St Andrew's before slowly falling out of favour and then struggling with a niggling knee problem which eventually led to his release by Blues at the end of last season.
As he now looks to get his career back on track, he has agreed a one-year contract with Coventry with the option of a further 12 months and will officially complete the switch on July 1 when his contract with Birmingham expires.
The deal is certain to go down well with Sky Blues supporters and Boothroyd said: "I know about Gary's affiliation with Coventry City and while that's a very positive thing, we are bringing him in because of his qualities as a player and a character, not just because he is a local lad.
"We feel he will be a very good addition to the squad and all Coventry City supporters will know that Gary McSheffrey in his pomp is an outstanding player in the Championship."