Paulinho, 29, moved to the Chinese Super League in the summer of 2015 following a disappointing spell at Tottenham Hotspur.
The versatile midfielder has since managed to resurrect his career at Guangzhou, earning a regular place in the Brazil national team alongside Barcelona target Philippe Coutinho and Neymar, now of Paris Saint-Germain.
The Chinese outfit had refused to negotiate his departure but Barcelona have agreed to match his €40m (£36.3m, $47.3m) release clause in order to complete his move to the Nou Camp
"FC Barcelona and Guangzhou Evergrande have reached an agreement for the transfer of the player Paulinho Bezerra for 40 million euros. The new Barça player will sign for the next four seasons," the club have confirmed.
"The player's buy clause is set at 120 million euros. Paulinho will undergo a club medical on Thursday and the signing of the contract and the official presentation of the new FC Barcelona player will also take place on Thursday."
The news come a day after Sergio Busquets urged the club to step up the pursuit of new signings following a humiliating 3-1 home defeat to Real on Sunday (13 August).
"We don't need new signings because of the result, but because we have to renew [the squad]. And now's the time, no matter what," Busquets sai, while conceding that it would be almost impossible for Barcelona to overturn the tie when they visit the Santiago Bernabeu on Wednesday night.
"We dominated the play but they were clinical and when we left them space they were lethal on the counter. There's no need for any excuses, now we have to draw up conclusions and look forward. We have the game at the Bernabeu on Wednesday. It's almost mission impossible, it will be really difficult to turn it around but we will try," he added.
Barcelona have endured a disappointingly quiet transfer window even though new manager Ernesto Valverde was expected to oversee a major overhaul - both in terms of arrivals and departures.
Paulinho is only the fourth signing of the summer following the previous low profile arrivals of Nelson Semedo, Gerard Deulofeu and Marlon Santos.
Meanwhile, Barcelona have lost Neymar to PSG in a €222m world record transfer with Cristian Tello being the only other player sold by the club this summer in a €4m plus add-ons deal.
Meanwhile, Jeremy Mathieu and Jordi Masip have also left the Nou Camp after terminating their contracts but other out-of-favour players like Arda Turan, Thomas Vermaelen, Douglas Pereira or Munir remain.
Another defeat to Real Madrid on Wednesday will surely force Barcelona to step up the hunt for new players as the club are still working to complete the big money arrivals of Liverpool ace Coutinho and Borussia Dortmund winger Ousmane Dembele to fill the gap left by Neymar.