Can I reuse a HD used for Time Machine?

I have a 350GB internal hard drive, which is now full. I also have a 500GB Time Machine external hd for backup. I just purchased a new 2TB external hd. My plan is to transfer all the Time Machine files over to the new 2TB hd, which will free up the 500gb drive. I then plan to use the 500GB external hd and the 350GB internal hd as my primary hard drives, and the new 2TB drive as my Time Machine.

So my question is this: Once a hard drive has been used as a Time Machine (like my 500gb external hd), how do you reformat it to function as a normal hard drive? Also, how do I transfer all the Time Machine files over from the 500gb drive to the 2tb drive? Should I first format the new drive as a Time Machine?

Thanks for any feedback!

G'day and welcome to the forums.

Hook up externally, go to Disk utility and select the drive and hit Erase and format Mac OS Extended (Journaled). Prior to doing this with the new drive installed and TM drive connected, use Migration Assistant from Utilities.

What computer as your post does not say? Mac Pro put in slots 1 boot, 2 500GB and 3 TM drive.

I'd probably use SuperDuper! or CarbonCopyCloner to clone the old TM drive to the new one.
Unplug the old one and see if TM will recognize the backup on the new drive.