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The Australian, 35, only competed in five events last year after a "tough" 2015 left him "exhausted".
He survived a shark attack at a tournament in South Africa and missed out on a fourth world title following the death of his brother Peter.
Surfing is among five sports confirmed for the 2020 Tokyo Olympic Games.
"It was nice to have 2016 off somewhat and decompress but I'm excited to put the singlet on again," said Fanning. "Let the show begin. It's going to be an incredible year.
"2015 was a tough year. A lot happened to me on camera and in my personal life. I just felt exhausted by the end of it."
The 11-stop WSL Championship begins on the Gold Coast of Australia from 14-25 March.
Three-time world champion Mick Fanning says he will return to the World Surf League full-time in 2017 for the first time since being attacked by a shark.