Tye was the stand-out performer in Durham's Blast campaign last season, claiming 21 wickets in 10 matches, to take his overall record in the competition to 67 wickets in 48, following a previous spell at Gloucestershire between 2016 and 2019.
He joins Northants off the back of his fourth BBL title, having helped Perth Scorchers overcome Brisbane Heat in last week's final. In the course of that match, he picked up his 300th T20 wicket in just his 211th match, surpassing the previous record set by Rashid Khan (213 games).
"I'm very excited to be joining Northamptonshire for the Blast," Tye said. "They're a good team that's had success in the competition in the past so I'll be hoping that we can recreate that success this year."
Tye, 36, will be reunited with his Australia team-mate Chris Lynn at Wantage Road, and has also played alongside the club's bowling coach, Chris Liddle, during their Gloucestershire days.
"I'm looking forward to joining Lynny, it's always better to have him on your team than to try playing against him," Tye added. "I'm excited to work with John Sadler too, I've heard really good things about him plus Chris Liddle and I go back to his playing days at Glos so I'm excited to see him and work together again."
Sadler, the head coach, added: "To get AJ on board is really pleasing, he's an amazing addition and gives our team a great balance. "His experience and skill set is exactly what we needed and he knows what's required to win games and win competitions too. He'll be a super asset for us this season."
Northamptonshire, two-times winners of the T20 Blast in 2013 and 2016, have struggled in the competition in recent years, with a solitary quarter-final appearance in the past five editions. However, with England's David Willey also returning to the club after his spell at Yorkshire, the captain Josh Cobb believes they will have a "world-class" core in 2023.
"AJ's got a fantastic record in T20 cricket and we were looking for someone to come in and bring real experience to the attack, someone that can bowl the tough overs in the latter part of the innings and be a banker for us at the death," Cobb said.
"Willo [David Willey] coming back is a great addition for us as an allrounder, then we've got Lynny [Chris Lynn] at the top of the order and AJ now with the ball. It gives us a real solid core of world class experience throughout the side.
"We know we fell away last year but we played some excellent cricket in the tournament, so hopefully with these two coming in alongside Willo we can push and go one step further this summer."