The 2019 world champion has won two rallies this year, in Sweden in February and Chile last weekend, with co-driver Martin Jarveoja.
Tanak spent three years with Hyundai before joining M-Sport at the end of 2022.
Hyundai said in a statement he would join Belgian Thierry Neuville (35), who has helped them to two manufacturers' titles, in the confirmed line-up.
"We want to be seen as a credible contender with the tools to do the job; that means the car, the organisation, and the driving talent," said team principal Cyril Abiteboul.
"In exploring our options for 2024, I opened a discussion with Ott, who was excited by the renewed ambitions and structure that we are putting in place.
"We are pleased that he is ready to resume the unfinished business that he has with our team."
Tanak said he was excited to return to the Germany-based outfit.
"Since our paths parted exactly one year ago, the team has been working very hard on the new technical structure," he said in a statement.
"Hyundai Motorsport has a clear vision and target for the near future, and it is something that convinced me to join our forces again."
M-Sport team principal Richard Millener said he was sorry to see him go.
"A lot of work went into making the dream of getting them back to M-Sport a reality," he said.
"Unfortunately, sometimes things just don’t go as you hoped, and their decision to leave the team at the end of the season is a consequence we need to accept."
