Williams have confirmed the team will part ways with Nicholas Latifi at the end of the 2022 Formula One season.
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The 33-year-old Australian had been looking for a way to stay in Formula 1 after his McLaren contract was terminated at the end of the season.
He will assist Red Bull with testing and simulation work as well as commercial activities, the team said.
Ricciardo said he was "truly excited" to be returning to the team for whom he won seven grands prix between 2014 and 2018, before leaving for Renault.
Team principal Christian Horner said: "It is great to bring Daniel back into the Red Bull family. He has enormous talent and such a brilliant character.
"I know the whole family is excited to be welcoming him home.
"In his role as third driver, Daniel will give us a chance to diversify, assisting in the development of the air, aiding the team with his experience and knowledge of what it takes to succeed in F1."
A smiling Ricciardo said the welcome he had been given by Horner, Red Bull motorsport adviser and the whole team was "something I'm sincerely appreciative of".
"The ability to contribute and be surrounded by the best team in F1 is hugely appealing, while also giving me some time to recharge and refocus," he added.
Ricciardo spent five seasons with Red Bull and left at the end of 2018 because he felt the team were becoming increasingly focused on Max Verstappen, to his detriment.