The Association of Tennis Professionals, which runs the men’s game, voted in London earlier this year to award the tournament to Australia.
It will be played from January 3 over 10 days in the lead-up to the Australian Open, the first Grand Slam of the year, starting in 2020.
Sydney will host the final of the 24-team event at the Ken Rosewall Arena, which will get a new roof, along with some round-robin matches.
There will be group action in Brisbane along with another city, reportedly Adelaide. The existing Brisbane International will continue as a women-only event.
Perth was widely seen to be in the running, but the ongoing success of the mixed-teams Hopman Cup, spearheaded this year by Roger Federer and Serena Williams, has thrown that into doubt.
“The ATP Cup fits perfectly with our strategy to innovate and look towards the future,” said ATP chief Chris Kermode.
“We know from our extensive discussions with the players that the ATP Cup will provide a great way for them to open their season.
“It will bring together the world’s best for a major team event that compliments existing scheduling, provides highly-coveted ATP ranking points and clearly links to the Australian Open.”
The event, supported by the likes of Federer and Novak Djokovic, is returning to the global calendar for the first time since taking place in Dusseldorf from 1978 to 2012, and will feature US$15 million in prize money, along with rankings points.
It will see nations split into six groups, with eight teams emerging from the round-robin stage to compete in the knockout phase until one team is left standing.
There will be up to five players in each team, with ties comprising two singles matches and one doubles, and player eligibility determined by ATP rankings.
Tennis Australia chief Craig Tiley said “the timing is right for expansion”.
“We want more players rewarded, more opportunities for them, more opportunities for fans to get to see them, more global exposure for the sport,” he said.
“A major step toward achieving that vision is to deliver world-class tennis to cities across Australia which is what the ATP Cup will do.
“It is the next piece in a vision that will ultimately grow tennis and provide inspiration for future generations.”
The new competition will be held on the back of a revamped Davis Cup tournament, run by the International Tennis Federation, which will take place from November 2019, bringing together 18 nations in one place for a week at the end of the season.