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The 2019 world champion's move comes just days after scoring a second victory of the WRC season with M-Sport at Rally Chile last weekend.
This will be Tanak's second spell driving for the Korean marque after sensationally leaving the team with a year remaining on his contract at the end of the 2022 season.
Aside from wins in Sweden and Chile, and a second in Croatia, Tanak's 2023 campaign at M-Sport has been plagued by misfortune and reliability woes.
The 35-year-old has however been convinced by Hyundai's new management structure, led by former Renault Formula 1 boss Cyril Abiteboul and its new technical director, ex-Volkswagen WRC and Williams F1 employee, Francois-Xavier Demaison.
"Since our paths parted exactly one year ago, the team has been working very hard on the new technical structure. Hyundai Motorsport has a clear vision and target for the near future, and it is something that convinced me to join our forces again," said Tanak.
"Our goal in this new chapter will be nothing less than to win all three titles, and with the new structure of the team, we have all the tools needed to achieve it. Game on.
"This year has gone by so fast together with M-Sport Ford WRT. I'm proud we have managed to win two rallies against such big manufacturers and we were able to be in the championship fight for the first part of the season.
"But this sport is tough and unfortunately we went down a few times too many, nevertheless all the people really tried hard to give us the best chances and I'm very grateful for them."
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Abiteboul told Motorsport.com that the signing of Tanak is a clear statement of intent from Hyundai and its commitment to the WRC.
Hyundai has not disclosed the length of Tanak's contract, but Abiteboul did state that "stability" is important for any team.
"For me, it is very important, signing a world champion and a rally winner and championship winner in any sport is extremely important, but it has also been our target since I joined the team," Abiteboul said.
"It is a way to state our ambition but a way to show that changes that we have done already are starting to be convincing, as Ott is coming back to us with good reasons. There is a bit of a feeling of unfinished business on both sides which we hope we can complete.
"I hope that everything we are doing shows that we like the sport which we have been in for more than 10 years, and we think that we are doing this not only to help Hyundai but to make the sport be a competitive environment, where Toyota have strong competitors. We want to be a stronger competitor for Toyota from next year and in the future."
Tanak will again team up with Thierry Neuville, who is under contract for next year, while its plans beyond and whether it will run three or four i20Ns next year are expected to be firmed up before the final round in Japan in November.
The team has held discussions with current full-time driver Esapekka Lappi, and Teemu Suninen and Dani Sordo, who have shared the third car for the balance of the year.
"We have got a bit of time to do it because when you have your car one and two secured with two championship contenders you can afford to wait a bit to see what opportunities there are," added Abiteboul.
"We need to make that decision in a well-considered way and that is what we are going to do in the next couple of weeks. I don't want to leave after Japan without any clear plans because it is all about planning and come January and the first rally, we need to hit the ground running."