Jay Tabb has agreed to join Town on a two-year deal from July 1st.
The former Republic of Ireland U21 international makes the switch to Suffolk on a free transfer, after seeing his contract at Reading expire.
Jay enjoyed a productive loan spell with Blues at the back end of last season, making nine appearances and scoring one goal.
The midfielder becomes the second signing of the summer, following Cole Skuse’s move to Portman Road from Bristol City.
"I really enjoyed my time at Ipswich and I'm delighted to sign permanently," Jay told the Club website.
"I'm pleased to get things sorted and I can't wait to get going again."
He leaves the Royals after clocking up almost 100 appearances, in which he played his part in helping the club win promotion to the Premier League, after arriving at the Madejski Stadium from Coventry in 2009.
The Club website will get reaction to the new recruit later this afternoon. For all the latest Town news, follow our social media channels- Twitter, Facebook, Keek and Instagram.