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On the back of another record-breaking year, Ko will be one of the main drawcards in the invitational amateur field for the event.
Since competing at this year's NZ PGA Championship, Ko has had a stellar year in which she became the youngest ever winner of an LPGA, was the top amateur at the British Open and won the US Amateur Championship.
NZ PGA Championship organising committee chairman John Hart said he was thrilled to confirm Ko will be back at the tournament.
"Lydia's golf has taken another huge step forward and we are absolutely delighted to have her back," he said. "She's deservedly at the top of the invite list for major tournaments all around the world, so to have her play at the NZ PGA Championship again is very exciting.
"Lydia was a major drawcard for fans last year, with some of the largest spectator galleries following her group, and we hope that even more people will take the opportunity to come out to watch her in person and to see what makes her such a special player."
Even with a full calendar ahead and busy year behind her, it was an easy decision for Ko to come back to Queenstown.
"Last year was an absolute blast and I had so much fun," she said. "It's not often that you get to play alongside a Hollywood star, give golf tips to the Prime Minister and take on the top male pros, so I was very keen to come and play in the tournament again.
"Last year was my first trip to Queenstown and I loved it. The tournament was fantastic, it's set in a beautiful place and had a great atmosphere. I'm really looking forward to coming back."
Organisers also confirmed former English cricketer Sir Ian Botham will take his place alongside Ko in the amateur field. The full field of 68 amateurs will be teamed with professionals as part of a two-ball, best-ball competition over the final two days of the tournament.
A strong professional field is already building with 2012 champion Michael Hendry and runner-up Mark Brown confirmed.