The Briton, who finished 11th in the standings this season, will join the reigning teams’ champions in 2023.
O’Sullivan joined the Williams Academy in January and went on to score two podiums in his rookie F3 campaign.
He drove with Prema at the Jerez post-season test, finishing second fastest on day two. His teammates for 2023 have already been confirmed as graduating Formula Regional European champion Dino Beganovic and third-place finisher Paul Aron.
O’Sullivan said: "I am really excited to be joining PREMA for the 2023 FIA Formula 3 season. It will be a new environment for me, but PREMA's history says all we need to know, so hopefully, we can have a good year together.
“The first impressions in testing were good, and the pace was pretty strong.
“I was still learning the car as there are a few differences, getting to know all the team and the engineers, and learning some Italian as well!"
Last month, O’Sullivan had his first taste of F1 machinery at Silverstone as his prize for winning the 2021 Aston Martin Autosport BRDC Young Driver of the Year Award.
O’Sullivan beat Louis Foster, Jonny Edgar and Oliver Bearman to last year's award, which also includes a prize of £200,000, after impressing in MSV Formula 2, BBM Ginetta LMP3 and Garage 59 Aston Martin GT3 machinery last year.
Team principal Rene Rosin said: “We are particularly looking forward to working with Zak. We are impressed by what he achieved in his maiden FIA F3 season and his career so far.
“He will bring in his experience, which is something we always really value, and he already did an outstanding job in post-season testing.
‘That will boost our preparations for 2023, and we are confident we will see Zak thrive in our environment.
“We are equally delighted to work with the Williams Driver Academy, and we are grateful for the trust they have put into us.”
Ferrari Academy driver Beganovic will make his F3 debut next season with Prema, having made his single-seater debut with the team in 2020 in Italian F4.
He graduated to FRECA the following year, finishing 13th, while also completing an Asian F3 campaign, where he finished seventh.
In 2022, Beganovic competed in both Formula Regional European and Asian Championships, finishing in fifth in the latter.
He sealed the European title 40 points clear of ART driver Gabriele Mini, scoring four wins and 12 podiums.
Mercedes junior Aron was the first driver to be confirmed for the team’s 2023 line-up last month, having also taken part in the post-season test.
Aron took his first steps in cars with Prema in Formula 4 in 2019, finishing third in the Italian championship.
He switched to ART Grand Prix for his move to the Formula Renault Eurocup in 2020, but returned to the Prema fold for FRECA in 2021, since when he has scored six race wins.
