The 49-year-old made the announcement on The Late Show With Stephen Colbert on Tuesday night - hours after saying in a radio interview he was still weighing up "personal decisions".
When the US presenter pressed him about his infamous quote that he would rather "break this glass and slash my wrists" than play Bond again, Craig excused his response by saying he was offered the role right after having finishing shooting Spectre.
"Instead of saying something with style and grace, I said something really stupid," he said.
When asked directly if he was playing Bond again, Craig said "yes" and was met with applause from the public.
Bond 25 will be his fifth turn as Bond, and the actor has confirmed it will be his last.
"I think this is it. I just want to go out on a high note and I can't wait," he said.
At 49, Craig will be the third oldest actor to play the character, after Sean Connery and Sir Roger Moore, whose last instalments as the charming spy was at 53 and 57 respectively.
Director Yann Demange, who made crime drama White Boy Rick, has been rumoured as the front runner to direct Bond 25.
Bond 25 is scheduled for release in November 2019.
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