The four-hole Champions Challenge will be played over the first, second, 17th and 18th holes of the Old Course on 14 July, with the best individual score at each hole counting as the team score.
Palmer's team consists of former Bay Hill member Ian Baker-Finch, defending Open champion Stewart Cink and long-time Orlando area (Isleworth) resident Mark O'Meara.
The winners will receive a check for £50,000 ($75,480) to be donated to charities of their choice.
"We anticipate a very special occasion," said the organising R&A's director of championships David Hill.
"I am sure all supporters of the Open championship will be excited by the prospect of seeing so many legends of the game."
The day prior, Palmer and two other multiple winners of the British Open will be honored by Scotland’s oldest university and the third oldest in the English speaking world.
Palmer will join fellow American Tom Watson and Ireland’s Padraig Harrington at a ceremony at 3:00 p.m. Tuesday, July 13, when they will be awarded honorary degrees by the University of St. Andrews in the town’s Younger Hall.