Wilkinson has toured both Australia and New Zealand with the Lions, making nine appearances and scoring 116 points.
The England fly-half left the north east club for the south of France after 12 seasons in 2009 and scored over 2,000 points during his time at Kingston Park.
Wilkinson will be aiming to help Toulon go one better this season following their Amlin Cup final defeat to Cardiff Blues in 2010.
The remainder of Pool Two is made up by Italian champions Petrarca and French newcomers Lyon.
Amlin Challenge Cup draw:
Pool One: Stade Francais Paris, Worcester Warriors, Crociati Parma, Bucharest Wolves
Pool Two: Toulon, Newcastle Falcons, Petrarca Padova, Lyon Rugby
Pool Three: London Wasps, Bayonne, Femi-CZ Rovigo, Bordeaux-Begles
Pool Four: Perpignan, Newport Gwent Dragons, Exeter Chiefs, Cavalieri Prato
Pool Five: Sale Sharks, Brive, Agen, Club de Rugby La Vila