The 36-year-old Spaniard has been a fixture with the Korean squad since it rejoined the WRC in 2014 and scored a second career victory in a dramatic finale at Rally Italia Sardegna in June.
Sordo is expected to share an i20 with nine-time world champion Sébastien Loeb, who is slated for six rounds next season in the second year of his Hyundai contract.
He will return to the line-up for his home event at RallyRACC Catalunya – Rally de España (24 – 27 October) as Hyundai battles to protect its diminishing manufacturers’ series lead from defending champions Toyota Gazoo Racing.
“The team has truly become like a family to me, and we have shared some fantastic moments together,” he said.
“The highlight has to be the victory in Sardinia this year, but we have had many competitive rallies over the years, including the memorable 1-2 in Germany in our first season. I feel very happy and comfortable with the team, but just as importantly I feel as competitive as ever.
“We have a lot of ambition remaining and I am pleased to have the opportunity to compete in seven WRC rallies with the team in 2020.”
Team director Andrea Adamo said Sordo has shown this season that he remains one of the most versatile and competitive drivers in the WRC.
“His win in Sardinia was an exceptional performance but he has shown his pace and potential in most of the rallies he has joined. For that reason it was a logical decision for him to continue with our team for another year,” he added.