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The 37-year-old has a long association with the team. He replaced former coach Warren Lees two years ago but had previously coached the side in 2009-2012.
Following his first stint with Sparks he joined the Volts management as an assistant coach.
He was promoted to coach for the 2015-16 season but resigned following a post-=season review.
Otago Cricket Association performance and talent manager Simon Forde said the association was fortunate to have King return for another season.
"With the growth of women's cricket it's great to have a coach of Nathan's calibre working alongside our group of talented players," Forde said.
"He certainly has all of the attributes required to get the best out of them and assist them grow into the next generation of White Ferns. It's an exciting time to be involved."
King, who has been coaching domestic cricket for nine years, said he was excited to lead the Sparks for another summer.
"Last season we introduced a number of new players and, with the loss of some experienced players, this will provide some great opportunities for a relatively young and aspiring group."
The Otago Sparks season will get under way on November 16, but the full season schedule has not been released yet.
King will name his squad in the next few weeks and the team will begin its preparations in September.