"I am excited to join Durham for the 2019 county season. Having played at Emirates Riverside in 2017 I know what a great place it is to play cricket. With the Ashes and ODI World Cup both being played in the UK in 2019 it will be a huge summer of cricket," Bancroft said in a statement.
"I am grateful for the opportunity and I can't wait to get over and make an impact with Durham."
Durham head coach Jon Lewis said: "Cameron provides us with a very talented overseas signing who can bulk up our batting line up and help us compete for silverware.
"Tom Latham has done a great job for us over the past two seasons but we anticipate Tom being unavailable due to the World Cup in 2019, therefore we were delighted to be able to bring Cameron in.
"Cameron is a talented top-order batsman and a great talent across all formats, he has the appetite and temperament for scoring big runs."
Bancroft will replace Kiwi Tom Latham as the foreign player in the side.
Along with Steve Smith and David Warner - who were banned for 12 months, Bancroft was also handed a nine-month ban for his involvement in ball-tampering.
His competitive cricket has been limited to the Northern Territory Strike League, and he will play in the WA Premier League club side Willetton before returning to the top level with the Perth Scorchers.
First Published: August 17, 2018, 1:39 PM IST