The 21-year-old made an impression in the Bundesliga during his first temporary spell with Die Roten Bullen in 2023-24, scoring 10 goals of his own and setting up 15 more while also winning the German Super Cup.
Simons's feats at the Red Bull Arena came after he posted terrific numbers with PSV Eindhoven during the 2022-23 season, where he scored 22 goals and provided 12 assists before PSG unsurprisingly triggered their €4m (£3.4m) buyback option.
The 2003-born playmaker is now a fully-fledged Netherlands international and played a major role in Oranje's progression to the Euro 2024 semi-finals, setting up three goals before opening the scoring against England in the last four with a long-range rocket.
Simons's rise to prominence for club and country inevitably led to interest from the Premier League, where both Arsenal and Manchester United were reported to have been keeping tabs on his situation in Paris.
Simons feels "valued" and "at home" at Leipzig
However, the 21-year-old has now returned to Leipzig for a second loan spell, although PSG have stressed that the German side do not have an option to make the deal permanent, meaning that Simons will be back at the Parc des Princes in 2025.
Speaking to the official Leipzig website after his transfer was confirmed, Simons - who will wear the number 10 shirt for Die Roten Bullen - said that he felt "valued" and "at home" at the Red Bull Arena.
"I got everything I wanted from my move to Leipzig. I joined a great team and felt everyone's trust and belief in me. I was able to develop as both a player and a person - RB Leipzig is the perfect place for you to do that," Simons said.
"On top of that, the club really value me and made it clear over the last few months that they would like to sign me. They highlighted a clear and concise plan for me for the coming season.
"I'm extremely motivated to keep on improving and to play my part in the club's success. I feel right at home here in Leipzig and I'm extremely happy to be able to play for this club and for these fans for another year. I'm ready to make history!"
RB Leipzig chief confirms "abroad" interest in Simons
Meanwhile, Leipzig board member Marcel Schafer confirmed that clubs both inside and outside of Germany were rivalling his side for Simons, who was also thought to have been a serious target for Bayern Munich.
"Xavi and RB Leipzig - it was simply a great match right away! He quickly became a key player for us and developed into one of the best players in the Bundesliga," Schafer added.
"We're extremely pleased that he recognised RB Leipzig as the best place to continue his development and that he believes in our ambitious targets, despite strong interest from other big clubs both in Germany and abroad."
Simons still has three years left to run on his deal with PSG, whom he initially joined from Barcelona's La Masia academy in 2019 but made just 11 senior appearances for before leaving on a free transfer for PSV in 2022.
It is still unclear whether Simons fits into Luis Enrique's long-term plans at PSG, so Arsenal and Man United could very well rekindle their interest in the 21-year-old when his second Leipzig loan comes to an end.