The network made the big announcement at its Upfront presentation in New York City on Tuesday.
The pop star teased a major announcement was coming when she confirmed a Times Square billboard featuring an eye illustration was one of her ads. When a fan on Twitter asked if it was about her album or a single, Perry responded, "guess again." Hm...what's the first syllable in Idol?
And Perry all but confirmed the Idol rumors when she appeared on The Ellen DeGeneres Show on Tuesday.
"Idol is coming back," Ellen DeGeneres, a former Idol judge, said, which Perry responded to with a simple nod. "Supposedly, you're going to be the first announcement that you're going to be a judge on the new American Idol."
"Judge not lest ye be judged," Perry retorted, citing a Bible verse. "But, they didn't say anything about constructive criticism and I'm good at that."
Perry, 32, served as a guest judge on the original series in 2009 after Paula Abdul
left the judges' table.
"We are thrilled to be ushering in this new era of ‘American Idol' with Katy leading the charge," Dungey said in a statement. "Her incredible accolades speak for themselves. We are so lucky to have this strong and talented woman help inspire and guide the next crop of artists as they pursue their dreams."
Idol ended its 15-season run on Fox in April 2016, only to be revived by ABC earlier this month.
"American Idol on ABC...that has a nice ring to it," Ben Sherwood, co-chairman, Disney Media Networks and president, Disney|ABC, said in a statement. "Idol is an entertainment icon, and now it will air where it belongs, in ABC's lineup of addictive fan favorites alongside Dancing with the Stars and The Bachelor. America, get ready for the return of a bigger, bolder and better-than-ever Idol."
Idol's other judges have yet to be announced, but original judge Simon Cowell, who is now on America's Got Talent's panel, confirmed he was asked to return and declined, while Kelly Clarkson is set to become a coach on The Voice's 14th season after she was pursued by Idol's producers.
As for Abdul, she told E! News she thinks ABC is a "great home" for the show, but has "no idea" if she will return as a judge.
American Idol will debut on ABC in 2018.