Williams, twice a finalist at Melbourne Park, is ranked outside the top 1,000 and has not played a competitive match since being dumped out of the US Open in the first round by unseeded Belgian Alison Van Uytvanck.
"I’ve been competing in the country for over 20 years now and the Australian community has always supported me wholeheartedly," Williams said in a statement on Monday.
"It will be an honour to play for the fans again and I’m looking forward to making more memories at the tournament this year."
Williams has lost her last six matches on the WTA Tour since reaching the second round at Wimbledon.
Her 23-times Grand Slam title-winning sister Serena Williams announced she would "evolve away" from tennis following the last US Open, where she bowed out in the third round.
