Border, who served as a selector from 1998 to 2005, will join chairman of selectors Andrew Hilditch and David Boon and Merv Hughes on the panel, Cricket Australia said on Friday.
"I have always loved working as a selector and only stood down because of other time constraints," the former batsman, who captained Australia a record 93 times, said.
"My circumstances have now changed and I am very happy to once again make myself available for this important role in Australian cricket."
Border played 156 Tests and 273 One-day internationals for Australia between 1978 and 1994 and is the second highest runscorer in Test match history.
The long-time chairman of Australia's national cricket selectors, Trevor Hohns, announced his resignation in April after coming under increasing criticism over a series of controversial team choices.