The 2003 show will be held Feb. 23 in Madison Square Garden, Michael Greene, head of the National Academy of Recording Arts and Sciences, told a news conference Wednesday.
The news conference was attended by Mayor Michael Bloomberg, who had extended an invitation for the Grammys to re-visit Manhattan after his election last November.
The annual show generates an estimated $40 million for the local economy.
The Grammys left New York after the 1998 show, when Greene and then-Mayor Rudolph Giuliani engaged in a public spat.
Giuliani accused Greene of spewing obscenities at a mayoral aide after a mix-up over the mayor's appearance at a Grammys news conference. Greene denied the allegation, and Giuliani called him a liar.
When the Grammys moved back to Los Angeles the next year, Greene said the dust-up was not a factor. He has often said the show should alternate between New York and Los Angeles.
But the Grammys stayed in California for the duration of the Giuliani administration.
The Feb. 23 show marks the first time the Grammys will be broadcast on a Sunday night.