The Manxman, who won four stages and the green jersey at the Tour de France, will take on the eight-day race, which runs from September 5-12.
Cavendish has a record 10 wins to his name at the modern iteration of the race, two more than second-placed man Edvald Boasson Hagen, and will be looking to add more at this year's edition, which runs between Penzance and Aberdeen.
"It is always an honour to race on the home roads of the Tour of Britain," Cavendish said.
"It is a race where I have always enjoyed success and I am really looking forward to race with what I know will be a strong Deceuninck-QuickStep team.
"It has already been a special year for me, and riding the Tour of Britain will be a great way to see so many of the people who have supported me throughout."
Since rejoining the Belgian squad this year, 36-year-old Cavendish has enjoyed a career resurgence after struggling with injury and illness for several seasons.
After taking his first win in three years at the Tour of Turkey, he followed it up with three more at the race and a victory at the Baloise Belgium Tour, before making the Tour de France squad after Sam Bennett's knee injury kept him off the start list.
During the Tour, he racked up four stage wins, bringing him equal with Eddy Merckx's stage win record, and also took his second green jersey, 10 years on from his first.
The race will mark Cavendish's 12th participation and a return following his last appearance in 2019.
"We always pride ourselves on the quality of riders we attract, and the participation of Mark Cavendish in this year's Tour of Britain will no doubt whet the appetite of the British public," said race director Mick Bennett.
"He's a true great of our sport – something he has proved once again throughout his unforgettable 2021 season – and I cannot wait to see him on the start line in Penzance."
The 2021 Tour of Britain kicks off with hilly stages in Cornwall, taking in a team time trial and a steep uphill finish in Llandudno, Wales, before heading through northern England and concluding with two stages in Scotland.
Click here for full details of the route.
Cyclingnews will have full coverage of the Tour of Britain, with stage reports, photo galleries, news and interviews.
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