Switzerland's Federer, who won the Wimbledon and U.S. Open titles this year, will be making his third appearance at the eight-man event that runs from January 11-14.
American world number four Andy Roddick has also accepted an invitation to play in the traditional warm-up event for the Australian Open, which begins on January 16.
Tournament director Colin Stubs said he was still conducting negotiations with crowd favourite Andre Agassi, who would be appearing for the ninthtime should he decide to attend.
"I will get on the telephone next week, but we have got an indication that he (Agassi) wants to come back down here," Stubs told a news conference.
Former Wimbledon finalist David Nalbandian of Argentina has also been confirmed for the tournament, as has compatriot Guillermo Coria and Germany's Tommy Haas.
Stubs said he was also trying to persuade 2005 Australian Open champion Marat Safin to round out the draw.
Australian number one Lleyton Hewitt had been asked to attend, though he had chosen to play the Sydney International tournament instead, Stubs said.