Nadal will compete against defending champion Stefanos Tsitsipas, Dominic Thiem and Andrey Rublev, who is appearing for the first time, in Group London.
The season-ending tournament will follow a round-robin format with players split into one of two groups, with the top performers progressing to the semi-finals and then the final on Sunday 22 November.
Novak Djokovic heads the Tokyo group and will take on in-form duo Daniil Medvedev and Alexander Zverev, who contested the Paris Masters final last weekend, and the second debutant, Argentinian Diego Schwartzman. The Spaniard said the experience of playing the finals in the British capital had been "one of the best" but backed the decision to move the tournament to Turin from next year. "I tried to fight hard in every single match in Bercy".
Nadal, who pulverised 17-time Grand Slam victor Djokovic in the French Open final last month to pull level with Federer on 20, has qualified for the ATP Finals for a record 16 consecutive years.
"I've spoken to a lot of players that are ranked 500 and lower and they are asking for any help to provide tournaments for them", he said.
"I think I am able to play a little bit better the last couple of years indoors than what I did at the beginning of my career without a doubt". The 34-year-old is hoping to end his 2020 ATP Tour season with another memorable moment in London. I hope to change that this week. Notably, this is the first time he is coming in as a Slam finalist though; Zverev reached the finale at the US Open earlier this year.
But the last of his five titles at the year-ender came in 2015 and, after his recent default in the U.S. Open and thrashing by Nadal in the French Open final he will be eager to put the year to bed with a powerful statement.
"Very happy to be back, that's for sure", said the Greek world No. 6.
Usually a hugely-popular week for tennis fans, this year's tournament will be staged without fans due to the surging COVID-19 pandemic which has forced another lockdown in London.
Austrian world number three Thiem, the U.S. Open champion, was runner-up in 2019 and would love to cement his breakthrough year by winning the most prestigious title outside of the four Grand Slams.
Alexander Zverev will begin his challenge at the ATP Finals on Monday still under a cloud in the wake of accusations of domestic abuse by his former girlfriend Olga Sharypova.