Pistorius's inclusion in the relay team meant the double-amputee athlete would also be able to take part in the 400m individual race, Tubby Reddy, chief executive of South Africa's Sports Confederation and Olympic Committee (SASCOC) said.
Pistorius, who races wearing carbon fibre prosthetic blades, will become the first double-amputee athlete to compete on the track at an Olympic Games.
His chance of taking in the 400m individual event looked to have eluded him when he failed to reach a second A qualifying standard time before SASCOC's cut-off on June 30.
The 25-year-old, known as the 'Blade Runner, had achieved the A qualifying time once this season when he clocked 45.20 in South Africa in March but SASCOC required their athletes to achieve the time twice, with one of the times being at an international meet.
However, Pistorius's inclusion on the relay team opened up his opportunity to race in the 400m.
"He was named in the Olympic team (in the 4x400m relay) and then the question arose as to whether he was allowed to run the 400m and he can because he is part of the team," Reddy told Reuters in a telephone interview.
"He has run the (individual) qualifying time but if he was not part of the relay team then he would not be going to the Olympics," he added.
Oscar Pistorius of South Africa runs in the men's 400 meters race at the Diamond League New York Grand Prix athletics meet in this June 9, 2012 file photo.
Pistorius was, understandably, excited about the chance to represent his country at an Olympic Games.
"Today is truly one of the proudest days of my life. To have been selected to represent Team South Africa at the London 2012 Olympic Games in the individual 400m and the 4x400m relay is a real honor and I'm so pleased years of hard work, determination and sacrifice have all come together," he said in a statement.
"I have run two Olympic 'A' standard times over the past twelve months and with the time I ran at the African Championships last week I know my speed and fitness are constantly improving so I will peak in time for the Olympics.
"I have a phenomenal team behind me who have helped get me here and I, along with them, will now put everything we can into the final few weeks of preparations before the Olympic Games where I am aiming to race well, work well through the rounds, post good times and maybe even a personal best time on the biggest stage of them all," he added.
Peet van Zyl, Pistorius's manager said his charge was now focused on showing what he can do at the Games in the 400m.
"That (the individual 400m) is the big thing for us. He has shown that he can run the times and he is just grateful for the opportunity to compete at the Olympics," Van Zyl told Reuters.