The 53-year-old singer will perform to 60,000 fans in Hyde Park next July when the UK capital will host the prestigious sporting event.
“Madonna is planning a huge comeback and was determined to do it at Hyde Park while the Olympics are on,” a source said.
“She’s been out of the limelight musically for a while but is ready to jump back into the saddle and thinks there’s no better time to do it than when London hosts the Olympics.”
Earlier this week, it was also revealed Madonna is to perform at next February’s Super Bowl, where she will headline the annual NFL match after beating off competition from Lady GaGa.
“When Madonna heard GaGa was in the frame, she knew she had to step up her efforts. She is going to deliver the kind of show never seen before in NFL history,” a source said.