The 28-year-old England striker suffered a toe injury in his left foot during the 1-1 first-leg draw against Bayern Munich on April 1 in the UEFA Champions League and he was clearly hampered in the return leg.
With forward Robin van Persie on the sidelines with a knee injury, it is a big boost for manager David Moyes as his team battle to qualify for European football next season with four games remaining.
It will also be a huge relief for many England fans ahead of the World Cup in Brazil this summer.
Moyes said: "Wayne Rooney has trained great this week. He is in really good form. Getting him back is a good thing.
"He just wasn't right with his toe at times in the last game."
When asked whether Rooney would be in the squad to travel to Goodison Park, Moyes replied: "Yes."
Moyes was in good spirits ahead of his first match back at Goodison Park since leaving the club last summer and he was also buoyed with the news that Van Persie is making good progress in his rehabilitation after picking up a knee injury against Olympiakos.
"Robin is making improvements," the Scot added. "We always thought he would be out for four to six weeks. We'll have a better assessment in the next week or so as we'll see how he is coming along.
"Our medical team is heading out there to see him this week and get a better feel as to exactly where he is."
Moyes confirmed that midfielder Marouane Fellaini has overcome a calf injury and should also be fit to face his old club.
"Fellaini didn't play against Bayern but we expect him back fit because he has trained all week," Moyes said.
Moyes ruled Rafael out due to a thigh problem while Jonny Evans is a doubt because of a long-term calf injury.
Sunday's fixture will be the first time Moyes has returned to the club where he spent 11 successful years.
A failed £28million bid from United for Fellaini and England left-back Leighton Baines angered some Toffees fans and the Merseyside club branded the offer as "derisory" and "insulting".
After being taunted by some Everton supporters during Everton's 1-0 win at Old Trafford in December, Moyes was reluctant to discuss the reception he may receive on Sunday.
"The game is not about me, it's about Everton and Manchester United," he said.
"I was proud to be manager of Everton at that time but my job now is to make sure I get a result for Manchester United. The fans were always terrific in my time there, they were very supportive and always right behind the team.
"We had some really big games there at times and they'll be supporting the team like the Manchester United supporters have for their team."
Watch Everton v Manchester United live on Sky Sports 1 from 4.00pm this Sunday