The “9 to 5” country singer tweeted a message to her 3 million followers sharing her excitement at the booking.
"I'm incredibly excited to FINALLY announce that the #BlueSmokeWorldTour is coming to @GlastoFest on June 29th! ;) Stay tuned for more info..." she wrote.
Festival organiser Emily Eavis added: "We are delighted to say that Dolly is coming to Glastonbury...It really doesn't get much better than this!"
Parton's latest album Blue Smoke was released in Australia on 31 January to coincide with her headline tour dates there. Her forthcoming Glastonbury performance is described as "soon to be legendary" on her website.
Deborah Harry, frontwoman of iconic Seventies band Blondie, has also revealed that her five piece will be appearing on the line-up.
At the NME Awards on Wednesday, the 68-year-old, told Metro: “We just heard today – we’re going to be doing Glastonbury.”
Whether Blondie or Parton will be headlining the festival remains unconfirmed.
"We're creatively involved in what we're doing and we're not just doing a review of our history," Harry said. "That's very important to us."
The group, who had long been rumoured to headline the Somerset weekend in June alongside Arcade Fire, performed an eight-song set at the ceremony with tracks including “Heart of Glass”, “One Way or Another” (One Direction free) and “Call Me”.
Harry became the first female musician to accept the Godlike Genius award in NME's 20-year history.
Arctic Monkeys left with five awards, with lead singer Alex Turner winning Hero of the Year.