The Boyzone singer, who played Weatherfield's Ciaran McCarthy for two years, has taken on the part of Ringo Leyden, an ex-friend of mechanic Keith McGrath (Alan O'Neill).
According to the RTE.ie website, Duffy will be seen on the programme for the first time in November. His character, a hospital nurse, will then return for a big storyline in 2009.
Fair City has aired on the RTÉ One network since 1989, making it Ireland's longest-running soap opera.
Duffy is also currently busy promoting Boyzone's reunion. Earlier this month, the group released Back Again... No Matter What, which contains their greatest hits as well as new tracks.