The Swede retired from professional football after a short spell with Japanese club Shimizu S-Pulse in 2012 following a career in which he spent nine years with the Gunners.
But the 37-year-old has announced his decision to make a comeback, although it has not been revealed which one of the eight teams in the new league the Swede will be playing for.
"Joining Indian Super League in September for three months to help promote football in India," Ljungberg posted on Twitter.
"Even though I retired, the opportunity to play in India is really exciting. I'm keen to share my knowledge and experience of the Premier League."
The ISL was devised in reaction to the nation's hugely successful rebranding of their domestic cricket format and had already tempted former Barcelona attacker Luis Garcia and ex-England goalkeeper David James out of retirement.
Ljungberg made 328 appearances for Arsenal between 1998 and 2007, scoring 72 goals. He was a regular in the 'Invincibles' Arsenal side that won the 2003-04 Premier League campaign.
Meanwhile, he scored 14 goals in 75 appearances for the Sweden national team, representing the nation at the two World Cups and two European Championships.