The pre-school show, featuring Tinky Winky, Dipsy, Laa Laa and Po, will return for a further 60 episodes on BBC digital channel CBeebies.
The show captured the nation's imagination when it launched in 1997 and went on to become a huge global export for the BBC, airing in 45 languages and 120 territories. It continued to be made until 2001.
The new series will feature the same characters on replica sets, but programme-makers say it will be "visually enhanced, bringing a refreshed and contemporary look and feel", and there will also be some CGI animation.
It was originally created by production company Ragdoll and the rights have gone on to be acquired by DHX Media. The new series is to be made by TV firm Darrall Macqueen, which has been behind Baby Jake and Topsy And Tim.
CBeebies controller Kay Benbow said: "Teletubbies is an enduringly popular series with our youngest viewers, although no new episodes have been made for over 10 years.
"I think that now is the right time to create new episodes of this much-loved, iconic show for the current CBeebies audience. I'm sure they will engage with and delight in the activities of Tinky Winky, Dipsy, Laa Laa and Po, in the same way that children and parents did when they first appeared on our screens.
Maddy Darrall, executive producer at Darrall Macqueen, said working on the show was "like being handed the television crown jewels".