The 34-year-old Sheldon-born player was a free agent after turning down the offer of a new contract at Everton.

And he has signed a two-year deal with the relegated club as they look to rebuild ahead of next year's Championship campaign.

Republic of Ireland international Carsley, who joined Everton in 2002 having played for Derby, Blackburn and Coventry, had reportedly been interesting West Brom and Derby.

Carsley's Everton contract officially runs out at the end of the month.

The 34-year-old midfielder severed his links with Everton today after rejecting a one-year deal on offer from boss David Moyes.

Carsley's family have continued to live in the Birmingham area while he has been at Everton, but the strain of that situation had concerned him for some while.

And considering he has a young family, the chance to move back to the midlands when his Everton contract ran out was always a likely outcome.

Everton boss David Moyes must now plug the gap in his squad left by the tenacious, hard-working midfielder.

But Everton have distanced themselves from claims that former Liverpool youngster Alou Diarra was being considered.

Diarra did not play a senior game with Liverpool in his stay at the club, but has since become a full France international and would cost £8million from Bordeaux.

However, it is understood that Moyes is not in the hunt for the player, while suggestions that he will move for West Brom's out-of-contract Hungarian midfielder Zoltan Gera have also been dismissed.

Moyes has been holding talks with club owner Bill Kenwright during the last few days, when transfer policy and his budget have been on the agenda.

Moyes has also discussed his own contract and a likely extension, but this is considered by insiders at the club to be a formality, with squad strengthening initially being considered more important.

Carsley is the 13th player to leave Goodison since the club clinched fifth place and a UEFA Cup qualification.

And is it the most significant, because the implication is that Moyes will be buying a younger player in this department.

Moyes said: "I would like to thank Lee for his years at Everton. He has undoubtedly been a big part in our success in the last few seasons.

"Lee feels he now needs to be closer to his family and everyone at the club fully appreciates that.

"We'd like to thank him, he has been a fantastic player on and off the field and he goes with my best wishes and we wish him all the best in the future."

Carsley was one of the few remaining players left from the squad Moyes inherited from Walter Smith in 2002.

He was included in the starting line-up for Moyes' first game at the helm against Fulham in March 2002 and amassed an impressive 198 appearances for the Toffees - 194 of which were under the current boss.