He will assist head coach Roberto Mancini as Italy's delegation chief, a post formerly occupied by the late Gianluca Vialli.
"The blue jersey is part of my life," said Buffon, who won the World Cup with Italy in 2006.
"I will put myself at the disposal of Roberto Mancini and the group, and I shall tread lightly," he promised.
"With Italy it is not the prize that counts but the investment, the sacrifices and the availability."
The Italian federation described the event as a "great day for Italy" because "Gigi is coming home".
Buffon will be in his new job in time for Italy's Euro 2024 qualifiers in September against North Macedonia and Ukraine.
He holds the record for most Serie A matches contested (657) and is the most capped player in Italy's history with 176 (1997-2018).
That encompassed five World Cups which included the high of 2006 when Italy beat France in a penalty shootout.
