The returns will comprise a $5.2 billion (A$7.3 billion) off-market buy-back, where shares will be bought back at up to a 14% discount.
The remainder will be paid in the form of a special fully franked dividend to be determined in January following completion of the buy-back.
Returning proceeds will take the total cash returned to shareholders over the past two years to $21 billion.
Speaking on a shareholder webcast this morning, BHP CEO Andrew Mackenzie said the outlook for the company was "rosy" given the company now had the ideal portfolio.
"I would also say we're highly investable," he said.
Now that the company has divested its shale assets, it only has one asset that doesn't generate double-digit returns: Olympic Dam in South Australia.