Agassi and former doubles specialist Stepanek will replace the Serb's former coaching duo of Boris Becker and Marian Vajda.
He parted company with Becker last year and ended a seven-year association with Vajda in May after seven years working together.
"Not long ago, @radek_stepanek and I were on the opposite sides of the net. Now we are teaming up to chase new goals together and share the love for the game. What exciting times we have ahead of us!" Djokovic said in an Instagram post.
Djokovic has slipped to 12th in the world since an elbow injury forced him to end his season in July.
He is expected to return to action at an exhibition event in Abu Dhabi on 28-30 December.
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