The truck mechanic and TV personality will ride the new Fireblade SP2 in the Superbike and Superstock classes.
The 35-year-old has not raced since suffering multiple broken vertebrae and a fractured sternum in a crash in the Dundrod 150 Superbike race in 2015.
Martin will also return to compete at the North West 200 and Ulster Grand Prix road races as part of the deal.
The Grimsby rider missed last year's TT and North West 200 to compete in the 2,712-mile Tour Divide mountain bike race in the United States.
Martin, who has 14 Ulster GP wins, caused controversy at the 2015 North West 200 by strongly criticising the event's 8.9-mile course, saying he was "bored to the back teeth of riding through chicanes".
The rider's outburst, for which he later publicly apologised to race director Mervyn Whyte, led many to believe that he had raced at the 'Triangle' circuit for the final time.
Martin has yet to fulfil his long-time ambition of winning a race on the 37.73-mile Isle of Man Mountain Course but has achieved several podium finishes since making his TT debut in 2004.
McGuinness retains his links with the official Honda team and is only three wins away from matching Joey Dunlop's all-time record of 26 victories.
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