According to The Hollywood Reporter, Cross will star as city councilman Duane, who strikes up a rivalry with Julie Cowen's character Claire.
Cross is best known for his role as Tobias Funke on the critically-acclaimed Fox comedy Arrested Development.
Last month, Cross announced his engagement to former House star Amber Tamblyn.
Modern Family scored 17 nominations at this year's Emmy Awards, which will take place later this month.
Modern Family returns to ABC with an hour-long special on September 21.
Watch a promotional trailer for season three of Modern Family below: