Ryder Cup captain Luke Donald will oversee the event in Abu Dhabi from January 13-15 along with two playing captains, with two 10-man teams competing in foursomes, fourballs and singles and all 20 players taking part in each session.
The competition effectively fills the gap left by the Seve Trophy, which was held eight times between 2000 and 2013 and gave captaincy experience to future Ryder Cup skippers Colin Montgomerie, Jose Maria Olazabal, Nick Faldo, Paul McGinley and Thomas Bjorn.
Ballesteros, who died from complications of a cancerous brain tumour in 2011, also captained the European side four times, including to a one-point victory in the inaugural event at Sunningdale in 2000.
The five-time major winner's son Javier wrote on Twitter: "Last October an ET player came to me to say that European Tour was thinking about bringing Seve Trophy back (I was very happy about this).
"I heard nothing more about it until only one day before the announcement was made, when ET contacted me to let me know there was a "new" match play event - being this an exact copy of The Seve Trophy - and wanted my dad to be involved in some way.
"We obviously said NO. We don't want anything out of this, but only The Seve Trophy back, not a copy of it.
"We believe our dad deserves something better from The European Tour, given the unconditional support he always gave to The European Tour and the legacy he left behind."
The European Tour was rebranded as the DP World Tour in November last year.
DP World Tour deputy CEO Guy Kinnings said: "The final arrangements came together very quickly to enable us to stage a team event in early 2023. I was personally in touch with the Ballesteros family before the announcement to brief them and we intend to discuss further with them.
"We honour Seve's legacy in many ways. His name adorns one of our main meeting rooms at our Wentworth HQ, we changed the name of our players' player award to the Seve Ballesteros award in 2017 and I remember in the 2018 Ryder Cup in France where the last thing our players saw before they left the locker room to go on the course was Seve's Ryder Cup bag with the phrase written above it, 'This is why you are here'. We respect Seve's legacy every single day and we will continue to do so."