In a strange twist of events, newly-appointed Pakistan Cricket Board chairman Nasim Ashraf announced Younis and not Mohammad Yousuf would lead Pakistan in the elite tournament.
The tournament kicks off with the qualifying rounds in India on Saturday.
Ashraf, who took over as PCB chairman after incumbent chairman Shaharyar Khan resigned Friday night, announced the decision at a press conference.
"Younis has been reappointed as captain and we have decided not to take Mushtaq Ahmed as deputy coach for the Trophy," Ashraf said, apparently on advice from Pakistan President Pervez Musharraf, who is also patron of the PCB.
Younis had refused to lead the team on Thursday, saying he did not want to be a "dummy captain," apparently over differences with some of the senior players and over selection of Faisal Iqbal as 14th player.
Yousuf was subsequently appointed captain.
Mushtaq's appointments as assistant coach were criticised as a match-fixing inquiry conducted by Justice Malik Mohammad Qayyum in 1998 barred the former leg-spinner from holding any post with the team.
Pakistan's regular captain Inzamam-ul-Haq is facing a four-match ban over bringing the game into disrepute during the August Oval Test against England.