The confirmation came as the Candystripes held a ‘past, present and future night’ earlier this evening at the Magee Campus in Derry.
Around 300 fans turned up for the event were former players, members of the current squad and stars of the future were introduced to the audience.
Among those from the ‘past’ were ex-Celtic player Paddy McCourt and Liam Coyle.
There was also huge recognition for the women’s team and the passion shown by Declan Devine ahead of the start of the new season next Friday night at the Ryan McBride Brandywell Stadium against UCD.
Midfielder McNamee returned to Derry City last month after a season at Cork City.
During last season, scored against the Candystripes while playing for Cork City.
The 26-year-old made over 150 appearances in his first stint at the Brandywell between 2011 and 2017.
“He was obviously one of the top targets when I came to the club,” Devine told the club website.
“I know I have signed a quality person and a quality player, and we are just really looking forward to working with Barry again.”
Since rejoining the club following the departure of manager Kenny Shiels at the end of a disappointing 2018 season, Devine has brought nine players into his squad.
The Candystripes are set for a new look with 10 players moving on from the club since the end of last season.
McNamee, who will vie for a place in Derry’s midfield alongside younger brother Shane, enjoyed a productive season at Turner’s Cross featuring regularly for the Leesiders who finished second behind Dundalk.