Written in 1493, the letter describes the explorer's discoveries in the New World and was addressed to King Ferdinand and Queen Isabella of Spain.
However, authorities received a tip in 2011 that several copies had been stolen and replaced with forgeries.
Spain's US ambassador Pedro Morenes received the letter in a repatriation ceremony in Washington.
Mr Morenes described the event as "a showcase of the ties that bind the United States and Spain together".
Homeland Security Investigations, a division of the Immigration and Customs Enforcement agency (ICE), conducted the investigation with the Department of Justice (DOJ), according to a statement from ICE.
The letter was a manual copy of the original, known as the Catalonia Plannck II Columbus and written in Spanish to King Ferdinand and Queen Isabella.
It describes the people, landscape and wealth Columbus found when he arrived in the Americas.
The monarchs had sponsored his journey, and forwarded the message to Rome to be translated into Latin, manually copied, and then sent to kings and queens across Europe to spread word of the discovery.
After receiving the tip about forged letters, the investigators sent an agent to the National Library of Catalonia in Barcelona in 2012 and determined their version was a fake.
However, according to Bloomberg, the expert who helped them determine it was forged was consulted by the real letter's latest buyer to check its authenticity.
Investigators say the authentic letter was first sold for 600,000 euros ($706,000) by two Italian book dealers in 2005, and most recently to another buyer in 2011 for 900,000 euros ($1.1 million).
Authorities contacted this latest buyer, who agreed to hand over the document. ICE has not named the person.
US attorney David Weiss said that they were "truly honoured to return this historically important document back to Spain - its rightful owner."
According to their release, since 2007 ICE has given back 11,000 artefacts to more than 30 countries - including 1,800-year-old Peruvian pottery, some highly valued ancient royal seals from Korea and recently thousands of pieces smuggled out of Iraq and shipped to arts and crafts retailer Hobby Lobby.
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