The 42-year-old broadcaster, much loved for his dance routines on the hit show, has said he is “excited to be back” as presenter.
X Factor boss Simon Cowell added: “Dermot’s back, hooray! And so is his dancing! Welcome home, Dermot.”
O’Leary, who had been a mainstay of Cowell’s show for eight years, departed in 2015 saying it was “time for me to move on”.
However, the star has now said he is “really looking forward” to the forthcoming instalment.
“I’m very flattered to be asked back to The X Factor, and am currently dusting off my dancing shoes,” O’Leary stated.
“There is nothing more exciting than hosting live TV on a Saturday night. The show is naturally very close to my heart, after having hosted it for eight years.
“I’m really looking forward to it, and excited to be back.”
Olly Murs and Caroline Flack, one-time presenters of The X Factor’s sister show The Xtra Factor, attempted to step into O’Leary’s shoes in 2015.
But their tenure was marked by falling audience figures – with BBC rival Strictly Come Dancing frequently triumphing in the ratings – and a number of gaffes.
During the live final won by teenager Louisa Johnson, technical issues left the duo exposed on stage, and earlier in the live shows run, chart-topping singer Murs prematurely announced the exit of contestant Monica Michael.
Fans who called for O’Leary’s return will welcome the BBC Radio 2 DJ’s familiar “Your Saturday night starts right here” catchphrase and twirl.
Another favourite making a comeback for 2016 is the room auditions.
Thames TV managing director and interim FremantleMedia UK chief executive Richard Holloway said: “Dermot is a much-loved part of The X Factor and one of the best presenters in the business.”