They will join Hemel Stags and University of Gloucestershire All Golds in the re-structured division, playing their home games at the University of Oxford's historic Iffley Road Rugby Ground.
Northampton withdrew their planned entry after admitting they were unlikely to be competitive, but the RFL are still hoping to announce a fourth new club from outside the game's traditional boundaries in time for the start of the new season next February.
Former Leigh and Oldham coach Tony Benson will be in charge of Oxford, while ex-Bradford winger Tevita Vaikona will be on the board.
RFL chief operating officer Ralph Rimmer told a news conference: "Oxford have assembled an extraordinarily strong, experienced and credible board who will provide first-class leadership off the pitch.
"I am sure we can look forward to them putting an exciting and competitive team on the field.
"As we have made clear previously, the long-term aim of introducing new teams into Championship One from new geographical areas is to unearth and develop new players, provide more opportunities and increase the sport's playing pool.
"We are also aiming to grow the sport's market by introducing new supporters to rugby league."
Vaikona, a former Tonga international who is now director of rugby at Oxford Rugby Football Club, will be joined on the board by former St Helens chief executive Tony Colquitt and professor Simon Lee, a one-time vice chancellor of Leeds Metropolitan University who was instrumental in establishing the sponsorship of the Carnegie Challenge Cup.
Lee, who is chairman of Oxford Rugby League, said: "Some people think that establishing professional rugby league in Oxford is a challenge to match the film Salmon Fishing in the Yemen, but we believe that rugby league will flourish among the spires of Oxford."
- the University of Oxford