Ricciardo, who took a step away from racing this year as Red Bull's third driver, will return to the grid from the Hungarian Grand Prix on July 23.
The eight-time race winner told ESPN last month that the "fairytale" end to his F1 career would be a return to the Red Bull team he left in 2018.
A stint with the secondary outfit will put him in contention to do that in future and will increase the pressure on out-of-form Sergio Perez at Red Bull.
Sources have told ESPN that Ricciardo is willing to drive at AlphaTauri for as long as it takes to prove he is over his difficult spell at McLaren in 2021 and 2022.
The news was confirmed on Tuesday, while Ricciardo was conducting a tyre test for Red Bull at Silverstone.
Red Bull said a strong showing in that session was what made the move happen.
Red Bull boss Christian Horner said: "It is great to see Daniel hasn't lost any form while away from racing and that the strides he has been making in his sim sessions translate on track. His times during the tyre test were extremely competitive. It was a very impressive drive, and we are excited to see what the rest of the season brings for Daniel on loan at Scuderia AlphaTauri."
De Vries' exit from AlphaTauri had seemed like a matter of when, not if, for a while, given his massive struggles and the repeated public criticisms made by Red Bull motorsport boss Helmut Marko.
Marko last month said that Horner had, in hindsight, been right to question whether De Vries was the right person to bring into the company's F1 programme.
De Vries, who was a Formula 2 and Formula E champion, earned a contract for the season on the back of a highly impressive F1 debut for Williams at the Italian Grand Prix last year, where he stood in for the unwell Alex Albon and scored points.
He has been unable to replicate that kind of performance in 2023, though.
The move brings Ricciardo back to the team he raced at in 2012 and 2013, when it was called Toro Rosso.
His impressive performances in that stint earned him a promotion to Red Bull for 2014, when he had a breakout season that included three F1 victories.