The 26 year-old Queenslander won his second PGA Tour title, the WGC "“ Accenture Match Play Championship in Arizona in February and finished fourth at the U.S Open in June.
"It's always good to come home to Australia and I'm excited to be able to play at the Emirates Australian Open again in November," Day said.
"It was great to get the win in February at the Accenture Match Play. I'm excited about being fit and healthy for the Open and look forward to competing against such a tremendous field"
Day played the Emirates Australian Open last year when he finished in a tie for sixth place at 8-under par at Royal Sydney Golf Club.
Deputy Premier and Minister for Tourism and Major Events Andrew Stoner said, "It is fantastic news that Jason Day, currently Australia's second highest ranked player, will join a star-studded field to play in the Emirates Australian Open in Sydney. Jason joins World Number 1 and four-time Major winner, Rory McIlroy of Northern Ireland to add even more class and depth to the Open."
"The NSW Government, in partnership with Golf Australia, has secured the Emirates Australian Open in Sydney until 2015.
"We are committed to the long term vision of seeing the tournament become the premier event of its kind in the Asia Pacific region," Mr Stoner said.
Golf Australia CEO Stephen Pitt said he was delighted to see Day return to Australia.
"It was great to have Jason back at the Open last year and we're really looking forward to seeing him take on The Australian Golf Club in November. It would be great to see him right in contention to win his national Open for the first time," Pitt said.
"Together with World Number 1 Rory McIlroy. This field is reloaded for a huge week of golf in Sydney."
The Emirates Australian Open will be broadcast live on the Seven Network across all four days and the championship will again be sanctioned by the PGA Tour of Australasia and OneAsia.
The Championship is owned by Golf Australia and is managed by World Sport Group with the assistance of TRP Sports.
Tickets are on sale 1 September via Ticketek at www.ticketek.comor by calling 132 849.