It was announced last month that Royle, 65, would be a football consultant at Norwich, but he has now left to return to former club Everton.
"I was happy with my role at Norwich City and wouldn't have considered an offer from any other club than Everton. It's like coming home for me," Royle told the Toffees' website.
"I'd like to thank Norwich for their co-operation and understanding with this situation and I wish Neil Adams and everyone at Carrow Road all the best for the new season."
He will now especially assist Martinez with developing new players at Goodison Park.
"Joe's experience and football know-how will be hugely beneficial for the youngsters at a key stage of their development," added Martinez. "He is the first major change in our structure in player development."
Royle scored 119 goals in 275 appearances for the Merseyside club and then led them to FA Cup glory in 1995 - their last major trophy success.