The Zimbabwe-born player has spent a year on the sidelines while dealing with mental health issues after he admitted to using racist language against former club team mate Azeem Rafiq.
Ballance, who will also play domestic cricket in Zimbabwe, played 23 tests for England between 2014 and 2017, scoring 1,498 runs, including four centuries, at an average of 37.45. He also appeared in 16 one-day internationals.
The left-hander played for Zimbabwe at the Under-19 Cricket World Cup in 2006 before moving to England.
"I'm thrilled to be joining Zimbabwe Cricket and can't wait to start work with some great coaches and talented players," Ballance said in a statement.
"The opportunity to represent Zimbabwe has given me a new-found passion and excitement for the game.
"I have kept in touch with a number of people within Zimbabwe cricket over the years and it has been great to watch their recent progress especially."
Zimbabwe Cricket's Director of Cricket Hamilton Masakadza said they were delighted to have an "immensely talented and experienced cricketer" back home.
"He's a great addition to our domestic and international set-up and we are looking forward to him making a massive difference for us," Masakadza said.
Yorkshire, who released Ballance two years early from his contract as per the player's wishes, have made sweeping changes following Rafiq's explosive allegations of institutional racism at the club.
Ballance has apologised to Rafiq in person.
