The British three-time major winner has been slowly working his way back to fitness and is now ranked 289th, up from 503rd just a week ago.
Murray, 32, won his opening match at the Shanghai Masters on Monday, beating Argentine qualifier Juan Ignacio Londero in three sets, following a quarter-final appearance in Beijing last week.
With his confidence seemingly growing by the day, Australian Open organisers said the former world number one had committed to extending his comeback into the majors in January.
"Confirmed: Andy Murray will return to compete at the #AusOpen in 2020," they tweeted.
The official Australian Open website said Murray "will return to the main draw with a protected ranking of number two and restored physical powers".
Federer to give Murray early workout at ATP Cup
He has made the final five times at Melbourne Park, losing four times to Novak Djokovic and once to Roger Federer.
However, arguably his most heartbreaking moment at the season-opening Grand Slam came not on the court but at an emotional press conference before this year's tournament.
Murray broke down in tears describing how the pain in his right hip, which had been operated on six months earlier, had become unbearable.
"I can play with limitations. But having the limitations and the pain is not allowing me to enjoy competing or training," he said, later revealing that even walking his dog had become a gruelling ordeal.
Tributes flowed for the well-liked Scot, with Billie Jean King called him "a champion on and off court".
Players also farewelled him in an emotional video screened on centre court after he lost an epic five-setter to Roberto Bautista Agut, with most believing his Grand Slam career was over.
"It's very sad that you have to take that position, but sometimes life is not perfect," Rafael Nadal said. "I just want to say thanks for the things that you gave to our sport."
But the match against Bautista Agut rekindled Murray's competitive spark and he opted to fight on and undergo hip resurfacing surgery.
American doubles legend Bob Bryan had endured the procedure -- which involves inserting an artificial hip implant with a rod that goes right down to the femur -- and warned Murray there would be no easy road back.
Murray reaches Beijing quarters, celebrates with nap
"No one's ever come back with this surgery on the singles court," he said at the time, adding that if anyone could do it a renowned fighter like Murray was prime candidate.
Murray said after his win over Londero that his movement on the court felt like it was steadily improving.
"In the beginning I didn't necessarily feel good, but last couple of weeks have been I think much improved," he said.
In 2013, Murray became the first British man to win Wimbledon for 77 years, ending the nation's obsession with finding a champion to follow in the footsteps of Fred Perry.
He repeated the feat in 2016, adding to a glittering career that also includes the 2012 US Open, two Olympic gold medals and 45 ATP crowns.
Australian Open organisers hope there will be another blast from the past if Belgium's Kim Clijsters can meet her goal of taking to the court again in January after an absence of more than seven years.
A crowd favourite in Melbourne, the 36-year-old retired to have a family but made a surprise announcement last month that she was making a comeback in 2020.
Clijsters has won four Grand Slams, including the 2011 Australian Open.
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