Matildas midfielder Alex Chidiac is back in the W-League with defending champions Melbourne City FC, after three seasons at Atletico Madrid.

Chidiac was part of City's title-winning squad in 2015-16 before two seasons with Adelaide FC and then a European move to Spain's Primera Division, where she played 22 games.

After injuries and a lack of game time with Atleti last season, Chidiac and the club last month agreed to terminate her contract.

The 21-year-old, who has made 16 appearances for the Australia, becomes the third Matildas player to return from Europe and sign for City after Emma Checker and Jenna McCormick.

Chidiac, who arrived in Australia late last week, will link up with the squad after completing her mandatory 14-day quarantine period.

City director of football Michael Petrillo said they were thrilled that Chidiac was available.

"She is a technically gifted player that can run at players and create chances which is exactly what we needed in our midfield," he said,

"Added to that she has had a great experience in Europe and knows what our program is about having been here with us before so it's a perfect fit."

Chidiac said she felt at home in her last stint with City so was excited to return.

"After a tough 12 months this is the right time for me to come back home for a change and a new challenge and I'm very excited to be returning to a quality league like the W-League," she said.