Cavendish will join up with his trade team Dimension Data for the eight-day national Tour that starts in Glasgow on Sunday, September 4 and finishes in London a week later.
With a possibility of seven stages being determined by sprints in this year's race, Cavendish and Greipel have ample opportunity to add to their tally of 10 and four stage victories respectively in the race.
>>> Tour of Britain 2016 route: stage by stage
Greipel won one stage last year and crossed the line first in the final stage in London but was relegated after being penalised for a dangerous sprint. Elia Viviani, who beat Cavendish to omnium gold in Rio, was subsequently awarded his third victory of the race.
Cavendish's teammate Steve Cummings will also race and he could be competitive in the 15km time trial in Bristol on stage 7a, that is a target for several riders, including BMC duo Rohan Dennis and Taylor Phinney.
There are 10 WorldTour teams confirmed for the 13th edition of the modern Tour which has been tailored as a preparatory race for the Qatar World Championships.
Race director Mick Bennett said: "In Mark Cavendish and André Greipel we have two of the world's top sprinters, who are both already multiple Tour of Britain stage winners, while we are delighted that BMC Racing Team will be bringing two outstanding time trialists in Rohan Dennis and Taylor Phinney to the race.
"This is the first of several exciting rider announcements that fans can look forward to and will build excitement for what will be another world-class edition of the Tour of Britain."
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