The 44-year-old Portuguese manager was relieved of the Panthers’ job in the central African nation of Gabon has been re-installed as a coach.
He originally got the coaching assignment in 2014 but his contract expired on 30 June after which Gabon went shopping for a replacement.
Prior to his second coming, Fédération Gabonaise de Football had revealed that applications for a new coach would close on July 20 and the candidates would be screened from 22-24 July 2016.
Costa who was shown the exit door owing to poor result in recent games had set a target of reaching the final of the 2017 African Cup of Nations, to be played on home soil. Panthers crashed out early at the 2015 African Cup of Nations after winning one and losing two of their group games.
“The new contract is with objectives and open to extension, conditioned by the course of the national team in 2017,” said the Gabon Football Federation.
It added on its website that it would “ensure that other factors off the field of play do not affect the progress of the Panthers”.
In his earlier spell with Gabon, news website Gaboneco reported that Costa was the best paid tactician of any national side on the in Africa.
“If I receive 70,000 euros a month, a salary which makes me the best paid (manager) in Africa, it’s because I’m the best coach,” the tactician said while reacting to the reasons for Gabon’s slump in recent games.
The former Portugal international defender has managed local teams in his native country and worked extensively in Cyprus and Romania.
Gabon first entered the Nations Cup in 1970 but failed to qualify for the finals until 1994.
Their best results came when reaching the quarter-finals in 1996 and 2012, a tournament they co-hosted with Equatorial Guinea.