The Japanese company, which quit the sport in 2009 after years of poor results with its own team, is reigniting one of the most successful partnerships in F1 history.
The move to feature turbo engines and extensive energy recovery technology from 2014 is behind Honda's re-think.
The height of McLaren-Honda's dominance - Japanese GP 1988
Honda said regulation changes were "central" to its participation.
Honda boss Takanobu Ito explained: "Honda has a long history of advancing our technologies and nurturing our people by participating in the world's most prestigious automobile racing series.
"The new F1 regulations with their significant environmental focus will inspire even greater development of our own advanced technologies."
Honda and McLaren dominated F1 from 1988-91, winning four consecutive world drivers' titles with Ayrton Senna in 1988, '90 and '91 and Alain Prost in '89.
Between them, they produced the most successful year in F1 history, winning 15 of the 16 races in 1988.
McLaren team principal Martin Whitmarsh said the partnership was "a new and exciting chapter" in his team's history.
He added: "The names of McLaren and Honda are synonymous with success in Formula 1, and, for everyone who works for both companies, the weight of our past achievements together lies heavily on our shoulders.
Honda: big in the '80s
F1 constructors' titles:
"But it's a mark of the ambition and resolve we both share that we want once again to take McLaren-Honda to the very pinnacle of Formula 1 success. Together we have a great legacy - and we're utterly committed to maintaining it."
McLaren will continue with current engine supplier Mercedes in 2014, but, with Honda waiting in the wings, it will undoubtedly be a slightly uncomfortable relationship.
Mercedes will also be keen to ensure that Honda has no access to its engine technology.
McLaren driver Jenson Button raced for Honda's factory team in F1 from 2006-8, winning the 2006 Hungarian Grand Prix but enjoying very little other success.
The Englishman, who won the 2009 world championship for the team after it was renamed Brawn following Honda's pull-out at the end of 2008, said he was "thrilled and excited" about Honda's return, describing it as "a great development for Formula 1 fans and the sport as a whole".
McLaren managing director Jonathan Neale said Honda would be prepared to supply other teams if required to do so, as specified in the F1 rules.
F1's new 2014 engine
1.6-litre, V6s, with single turbo. Engines can rev to 15,000rpm, five power units per season per driver (each engine does 4,000km). 15% fewer moving parts
Size unlimited, maximum revs 125,000rpm
Energy recovery (Ers) system:
161bhp for 33.3 seconds a lap
No more than 100kg (about 140 litres) of fuel in a race; max fuel-flow rate of 100kg per hour. This is a 30% increase in fuel efficiency
The new F1 engine regulations have come in for criticism from commercial supremo Bernie Ecclestone, who believes they are unnecessary, and smaller teams are concerned about the up-front costs of the engines.
These are significantly higher next year than they are at the moment, although the manufacturers have all promised to ensure costs come down over a five-year period so that they even out in the end.
Neale said: "Clearly F1 has to be cost-conscious but I think we have to also recognise that F1 cannot sit still.
"If it's going to be a technology showcase and contemporary with its markets, then embracing technology and making sure we are energy efficient is ensuring it stays healthy for the long run.
"So I'm sure there will be short-term pain, but I'm also sure that these technology steps are long-term the right way to go."
The engine rules were changed to make F1 more relevant to the road-car industry, and with the hope of attracting more manufacturers back into the sport.
Honda's return appears to be a vindication, and there are rumours other companies are considering entering the sport as well, with Toyota, Hyundai, VW/Audi and Ford mentioned.
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