Yates, who last ran for Britain at the 1993 World Championships in Stuttgart, was given the sole remaining 1500 metres place for Athens when the selectors added four names to the team.
The 28-year-old almost retired last autumn after being forced to live on social security, but he earned his call-up after finishing third in the trials in Birmingham before clocking his fastest time for four years in Hechtel last weekend.
Yates said: "I have had to put up with a lot, with people writing me off, saying I was finished. This will help prove them wrong. A lot of credit has to go to my coach, Bruce Longden. I was close to retiring last September but from that he has got me to the World Championships."
Yates pipped Anthony Whiteman, one of Britain's European Cup heroes, despite being two seconds slower than his rival who missed the trials earlier this month through illness.
"It was a very difficult decision," the performance director Malcolm Arnold said. "It was a case of choosing someone who had run very well before the trials, but who had not run since, or someone improving rapidly."
For Yates - a former European indoor 1500m champion - it completes a remarkable return, having admitted he "went off the rails" after being poised for a golden future. He was earning around pounds 80,000 a year, but after finishing sixth in the 1993 World Championships he slipped to 31st in Britain.
Chelmsford's Keith Cullen and Bromsgrove and Redditch's Adrian Passey got the nod in the 5,000m over Ian Gillespie. Passey won the trials in Birmingham, but missed out on automatic selection because he had not met the qualifying time. The 33-year-old did so in Hechtel - slicing two seconds off his personal best - although he was beaten by Cullen, who knocked 10 seconds off his best, and Gillespie.
Edinburgh's Paul Walker, who dipped under the 800m qualifying mark by a tenth of a second on the last possible day - a meeting in Stretford on Tuesday, is the other addition.