Parker, a record-setting quarterback as a redshirt freshman in 2009, was a first-round draft pick of the Rockies.
"I was in a situation where I couldn't make a bad decision," Parker said in a prepared statement. "All my options are still on the table at this point. The only option I have ruled out is playing baseball exclusively for the Colorado Rockies right now. Negotiations will continue with the Rockies, but I will play football at Clemson this fall."
Parker's return is a huge boost for a program trying to defend its 2009 ACC Atlantic Division title without C.J. Spiller and Jacoby Ford. Parker is the only athlete in Division I college sports history to throw 20 touchdown passes and hit 20 home runs in the same academic year.
Last year he completed 205 of 369 passes for 2,526 yards and 20 touchdowns. He set school freshman records in all of those categories and had a school-record streak of seven straight games with a touchdown pass.
Parker and the Rockies were unable to come to an agreement Tuesday, and he informed Clemson football coach Dabo Swinney of his decision to return late Tuesday night. While Parker could still play for the Rockies, this decision will likely lessen his signing bonus. Colorado has until Aug. 16 to sign Parker.
If he doesn't sign by the deadline, the Rockies would lose their rights to Parker and he would be eligible to be picked by other teams in the 2011 MLB amateur draft.
"We are very excited to have Kyle back," Swinney said in a statement. "Whenever you have a returning starter at quarterback who led you to the Atlantic Division title, that is a real plus for your team. He is a dynamic athlete who brings a lot of positives to our offense. "When I talked with him late last night, he was excited to get back and get started."
Heather Dinich covers the ACC for ESPN.com