Dunlop missed the event last year, but the three-time Solo champion will go head-to-head with Bradford’s Dean Harrison at the event, which takes place from July 8-11.
The 19-time Isle of Man TT winner has confirmed his entry on the Tyco BMW Superbike and MD Racing Honda Supersport machines.
Dunlop was forced to withdraw from his debut at the Pikes Peak Hill Climb in Colorado in the USA on June 30 after injuring himself in a crash in the Donegal International Rally.
The Southern 100, known as the ‘Friendly Races’, are held each summer around the 4.25-mile Billown course near Castletown.