O'Connor, who played Ned Parker on the soap between 2005 and 2008, is due to play an ex-military medic named Ally who arrives in Chester fresh from service in Afghanistan.
"He has a dark past that will be uncovered eventually in true soap style," he teased to Sydney's Daily Telegraph.
O'Connor found fame in Oz as a contestant on the 2004 series of Australian Idol and also appeared in UK reality show Celeb Air in 2008.
During his time on Neighbours, O'Connor's character survived a fire, a car crash and discovered that he was secretly a father.
Ned's love child Mickey Gannon, played by child star Fletcher O'Leary, left Neighbours in July 2009.
Watch a clip of Dan O'Connor in Neighbours below: