The event will carry a purse of USD 750,000.
The King's Cup last featured on the Asian Tour in 2014 when Thai great Thaworn Wiratchant claimed a record 18th title.
Asian Tour Commissioner Kyi Hla Han said the return of the King's Cup was a tremendous boost for the development of professional golf in the region.
"Since the beginning of this year, the Asian Tour has already welcomed back tournaments in Singapore, Myanmar and Korea and also launched a new tournament in Japan. With the King's Cup now featuring on our 2016 Schedule, it will provide further playing opportunities for our members, especially with the Olympic Games being held a few weeks after the tournament.
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"We are also delighted to co-sanction the King's Cup with The European Tour. I believe this will strengthen what is already a highly regarded and prestigious golf tournament," he added.
"We had a very successful visit to Thailand in February. It's a wonderful country with some of the most warm, welcoming people in the world, so we are very much looking forward to returning for the King's Cup," he said.
"We have long enjoyed a very successful relationship with the Asian Tour, and adding a new co-sanctioned event to our schedule is another positive step forward."
The King's Cup will be the second tournament in Thailand to be jointly sanctioned by the Asian Tour and the European Tour following the staging of the True Thailand Classic earlier this season.
The Sports Authority of Thailand (SAT) will support the King's Cup once again as a major sponsor.