It will be Cavendish's first race since he crashed out of the Tour de France in July, sustaining a fractured scapula. The 32-year-old was caught in a collision with Peter Sagan (Bora-Hansgrohe) in the sprint finish on stage four.
Cavendish has a long and successful association with the Tour of Britain: he has won 10 stages, including two victories in his first year as a professional in 2007 with T-Mobile.
Last year's Tour of Britain overall champion Steve Cummings will not be part of Dimension Data's line-up, as he recovers from injury also sustained at the Tour de France.
Instead, the South African team's overall hopes will be pinned on 2009 and 2015 ToB winner Edvald Boasson Hagen. The Norwegian has enjoyed a successful 2017 campaign so far, winning stage 19 of the Tour de France, and taking overall victories in the Tour of Norway and Tour des Fjords.
Along with Cavendish and Boasson Hagen, Dimension Data will a field strong back-up team consisting of Austrian Bernhard Eisel, South African Jay Thomson, Yorkshireman Scott Thwaites and Australian Mark Renshaw.
"It is great to be heading back to the OVO Energy Tour of Britain this week," said Dimension Data sports director Roger Hammond – himself a ToB stage winner in 2005 and 2006.
>>> Tour of Britain 2017 route: stage-by-stage details and where to watch
"As this event has grown in stature year on year, so has our team and the last two years in particular were fantastic for us.
"We will no doubt be looking to put on a good show once again, we always start a race with the goal to win, this year’s Tour of Britain will be no different."
The 2017 Tour of Britain starts in Edinburgh, Scotland, on Sunday September 3 and concludes eight stages later in Cardiff, Wales, on Sunday September 10.
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