The 31-year-old revealed the news Wednesday in a video message.
"I always hoped the Invictus story would continue after the London games," Harry said. "And having seen so many new people benefit from their journey to Orlando this year, I definitely didn't want it to end here. So today, I am absolutely delighted to announce that the Invictus legacy will continue when Toronto hosts the third Invictus Games in September 2017."
The international sporting competition involves athletes who are wounded and ill military servicemen and women from 15 countries. The first Invictus Games took place in London's Olympic Park in 2014. No event took place the following year, as more time was needed for planning and fundraising.
The 2016 Invictus Games will be held at the ESPN Wide World of Sports Complex in Orlando between May 8 and May 12 and will feature 500 participants from nations such as Afghanistan, Australia, Canada, France, Germany, Iraq, Italy, Harry's native United Kingdom and the United States.
Harry said he would visit Canada in May, ahead of the Orlando event, for the official launch of the countdown to the 2017 Invictus Games.
"It is a year steeped in rich Canadian military history, marking the anniversaries of historic battles that shaped and defined the nation," the prince said. "It's also the year when Canada will commemorate its 150th anniversary of Confederation. I can't think of a better way to mark this milestone than by paying tribute to the soldiers and veterans who have served their country so bravely and to support them along their journey to recovery."
Canadian star Mike Myers will attend next year's event as a special guest, according to the official Invictus Games website.
"Each one of the competitors traveling to Orlando in just over 50 days represent an unconquerable, Invictus spirit," Myers said. "They've been bloodied by war, undergone surgery upon surgery, facing some of the darkest pain imaginable. Yet, each of them have an unwillingness to let circumstance determine fate. I am inspired to help generate a wider understanding and respect for those who serve their country, as well as their families and caregivers. The Games begin May 8th in Orlando, they continue in 2017, and may they continue each year for many years to come."