Eight nations will compete for US$17.6 million (R140-m) in the tournament - a dress rehearsal for the 2010 World Cup.
Fifa president Sepp Blatter said the event will be “an ideal test run” for the World Cup organisers and South Africa's infrastructure.
“As in Germany in 2005, we are looking forward to a festival of champions and thrilling matches,” Blatter said.
With concerns that the new stadium being built in Port Elizabeth will not be ready for the kick off on June 14, the Confederations Cup organising committee approved two different match schedules - one for four stadiums and one for five.
The tournament will bring together the host South Africa, World Cup holders Italy and the champions from the six regional confederations which make up Fifa.
Those include Iraq, Egypt, the United States and Brazil.
If Italy wins this year’s European Championship, the runners-up will compete in South Africa.
The winners will receive US$3.75-million (R30m), with US$3.25-million (R25m) going to the runners-up.
The teams ranked fifth to eighth will each get US$1.4-million (R11m).
The tournament draw is scheduled for November 22 in Johannesburg.