The character will feature in a new CBS All Access series chronicling his life after Star Trek: The Next Generation.
The actor announced the news in a surprise appearance at the annual Star Trek convention in Las Vegas on Saturday, after months of speculation.
His career spans almost six decades and includes the role of Professor Charles Xavier in the X-Men franchise.
Sir Patrick, who is 78 and British, played Picard in 178 episodes of the sci-fi television series between 1987 and 1994, and in four feature films.
"I will always be very proud to have been a part of the Star Trek: The Next Generation, but when we wrapped that final movie in the spring of 2002, I truly felt my time with Star Trek had run its natural course," said the Shakespearean actor, who lives in New York City.
"It is an unexpected but delightful surprise to find myself excited and invigorated to be returning to Jean-Luc Picard and to explore new dimensions with him."
Alex Kurtzman, the executive producer on the new yet-to-be-named show, said: "It's a privilege to welcome Sir Patrick Stewart back into the Star Trek fold."
"For over 20 years, fans have hoped for the return of Captain Jean-Luc Picard and that day is finally here. We can't wait to forge new ground, surprise people, and honour generations both new and old," Mr Kurtzman said in media reports.
Details on the new series, which will be available through the US streaming service, are still under wraps, including title and release date.
Star Trek is a multi-billion-dollar cultural phenomenon, which turned 50 years old in 2016.