The 31-year-old Colombian international, who won two Champions Leagues with Real Madrid, joined Al Rayyan in Qatar from Everton a year ago but played just 15 games due to injuries.
"He's here, welcome James Rodriguez to Olympiakos and Piraeus," Olympiakos said in a statement.
The move which means James will play in the Europa League but will miss Thursday's match against Bundesliga side Freiburg.
Earlier Thursday, Al-Rayyan said Rodriguez's contract had been terminated by mutual consent.
Rodriguez won the Golden Boot at the 2014 World Cup in Brazil with six goals in five matches.
The playmaker has also played for Porto, Monaco and Bayern Munich.
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