The move means that Austin's Baggies career is almost certainly over, with the 31-year-old striker's contract expiring this summer.
Austin joined the Baggies from Southampton in a £4m move in the summer of 2019, scoring 11 goals in 45 appearances - but found time on the pitch hard to come by this season.
He rejoins QPR, whom he left in 2016 for Southampton. He netted 47 goals for the club in 89 appearances in his previous spell.
Albion sporting director Luke Dowling shared his thanks to the striker in a statement published by West Brom.
“I’d like to thank Charlie for his dedication and professionalism during his season and a half with us.
“Many of his goals for us proved to be crucial and I don’t think any Albion fan who was at St Andrew’s will forget his performance against Birmingham City to earn us a valuable win at what was a pivotal point in our season.
“Everyone at the training ground will miss Charlie’s presence and we all wish him well in his future career.”
Austin Tweeted: "Delighted to be back at QPR. Just an opportunity I couldn’t turn down, looking forward to getting to work with the lads and the management staff."
The move leaves the Baggies with few options up front, with no senior striker featuring for the club during their FA Cup exit to Blackpool over the weekend.
Sam Allardyce expressed his desire to sign one or two forwards over the course of the month, with the side desperate for goals to help try and fire them to Premier League safety.
Meanwhile, the club also confirmed the arrival of veteran goalkeeper Andy Lonergan, with Jonathan Bond expected to leave The Hawthorns imminently.