Tanak started out with M-Sport, first standing on the world championship podium with them in 2012 and taking his first rally win in 2017 when they won the manufacturers' title.
"M-Sport is the place that raised me as a driver and the place that taught me all the hard lessons and experience to become a top level player in the World Rally Championship," he said in a statement.
"Since becoming a world champion I have not been able to defend the title, and I will not be able to make peace with myself until I do."
M-Sport team boss Malcolm Wilson said the Estonian had tested the Ford Puma car already.
"It is fair to say from Ott’s initial feedback that we are confident we can challenge for the world championship in 2023," he added.
The season starts with the Monte Carlo Rally on January 19-22.
