Santa Cruz heads to Blackburn
The 29-year-old Paraguay international, who scored 29 goals in two seasons at Ewood Park, has struggled to make an impact at Eastlands since leaving Rovers in a £17.5 million deal in the summer of 2009.
Rovers confirmed the deal after the player completed a medical at the club's training ground this morning. He is the club's first signing since their takeover by Indian firm Venky's in November.
Manager Steve Kean said: "When he was here first time he had a fantastic time and showed his quality. I think he feels he has got a little bit of business to finish. Hopefully he will go and do that until the end of the season.
"He has got an infectious personality and was very popular here first time around. I'm sure he will be this time. He's coming back to a place that was special to him and I am sure he is going to deliver as good if not better."
City have hardened their stance on the issue of wages for loan players since agreeing to subsidise Craig Bellamy's move to Cardiff earlier this season and Blackburn will pay the majority of Santa Cruz's salary.
Kean believes that shows how serious Venky's are to bring top players to the club. The company, who are yet to win over the fans, were ridiculed earlier this month for making over-ambitious attempts to sign Brazil star Ronaldinho.
He said: "That is something that shows the fans we can now go and compete and we can see off other teams, not only in this country but abroad. It shows the ambitions of the owners to match these fees and salaries to bring quality to the club."
The agreement with City contains no provision for a potential permanent deal but Kean plans to continue negotiating in the hope of securing Santa Cruz's services long term. He said: "We are trying to speak to Manchester City to see if there can be an option at the end of it. We'll ask for that and if we can get it, all the better."
Santa Cruz has made just two appearances this season at City, where he has been behind Carlos Tevez, Mario Balotelli and Emmanuel Adebayor in the pecking order. His move has been hastened by City's signing of Edin Dzeko this month.
Kean said: "I don't think his medical fitness is an issue although his match sharpness might not be there because he has not played as many minutes as he would have hoped."