Parker averaged 8.3 points, 3.0 rebounds and 3.0 assists in 72 games (65 starts) last season for the Cavaliers.
The Bradley product has averaged 7.8 points, 2.9 rebounds and 2.5 assists in 153 games (146 starts) over the past two seasons with Cleveland.
"Bringing back Anthony was a high priority for us. We place great value on the leadership, professionalism and veteran presence he brings both on the court and in the locker room," said Cavs general manager Chris Grant. "His high basketball IQ, ability to shoot with range and play solid perimeter defense made re-signing him extremely important for us."
Over 443 career games (372 starts) with Philadelphia, Orlando, Toronto and Cleveland, Parker has averaged 9.3 points, 3.2 rebounds and 2.3 assists. The eight-year veteran ranks sixth in the NBA in three-point percentage (.409) among all active players with a minimum of 1,000 three-point attempts.
The Cavaliers also waived forward J.P. Prince on Monday.