The self-taught artist, who is originally from Fife, said he was not a racist, but one reason for the move was the amount of "Arab and Russian" people buying up property in the area - Knightsbridge - where he lives, which had in his view changed the atmosphere of his neighbourhood.
He revealed his move during a candid event at the Kelvingrove Art Gallery and Museum last night, held in support of Maggie's Cancer Care.
Vettriano, whose retrospective at the museum looks likely to attract around 100,000 visitors, said he had grown tired of living in London. His new home and studio is in central Edinburgh, where he lived for many years in the 1990s.
Speaking in front of a sizeable audience, Vettriano said living in London had, in his view, become exhausting and expensive, and he was glad to be back in Scotland, where he will be permanently based, from early next month.
He said: "It (London) has been taken over by Arabs and Russians. You go outside at night and they are sitting with their mobiles and hubbly-bubbly pipes. They don't talk, they just smoke.
"I live in Knightsbridge, which is a lovely part of the city, but it's changed. Knightsbridge has never really been London. It's always (had the feel) of Rome or whatever.
"But I don't enjoy it any more. Edinburgh is more manageable, so I've decided to come home.
"It'll be good to be back in Scotland."
In a wide-ranging In Conversation event, Vettriano talked about his artistic pre-occupation with erotically charged scenes, his rise to success and low moments.
He criticised the National Galleries of Scotland for not permanently displaying his self-portrait The Weight, which it did temporarily. Vettriano said the self-portrait was among his best work.
He said he would continue to paint in the south of France and was shortly to begin a project with Ennio Morricone, the lauded film composer. Morricone is to compose music to accompany paintings by Vettriano.
He said: "I am going to be working with Ennio. He is apparently a fan of mine and his people asked if we could collaborate.
"He will go through my backlog of paintings - or I might paint a new series - and he will score music to accompany them. Either way, I will complement the project by painting his portrait."
He talked of being rejected from the Edinburgh College of Art, and how he felt glad, in retrospect, that he had failed to attend the college.
"They would have made me paint abstract paintings and I don't want to do that," he said.