Red Bull finalized the hiring Wednesday after Ricciardo and the team both indicated during last weekend's season finale they were formalizing the role. As the third driver, Ricciardo will help Red Bull with testing and simulator work, as well as commercial activity.
Max Verstappen, the reigning two-time world champion, and Sergio Perez are the team's two drivers.
“It is great to bring Daniel back into the Red Bull family. He has enormous talent and such a brilliant character, I know the whole factory is excited to be welcoming him home," said Red Bull team principal Christian Horner.
Horner said Ricciardo's role "will give us the chance to diversify, assisting in the development of the car, aiding the team with his experience and knowledge of what it takes to succeed in F1.
“We're very pleased to be working with Daniel again and look forward to everything he will bring to the team in 2023."
Ricciardo first joined Red Bull in 2014 and finished third in the championship and scored the first three of his eight career victories. He won a race in 2016, the year he was the only driver to finish all 21 races on the schedule, and again in 2017 when he scored nine podiums.
Ricciardo won two of the first six races to open the 2018 season, which included a victory at Monaco. He then left the team to drive for Renault for two seasons, then spent the last two years with McLaren. Ricciardo held the driver option with McLaren for 2023 but was bought out by the team.
He had said repeatedly he was willing to sit out a season to remain in contention for a good seat on the F1 grid rather than take a ride with a backmarker team or move to another series.
“I already have so many fond memories of my time here,” Ricciardo said of Red Bull. “For me personally, the ability to contribute to and be surrounded by the best team in F1 is hugely appealing, whilst also giving me some time to recharge and refocus.”
Red Bull, this season, won both the driver and constructors titles.