Shortly after pulling out of the iconic festival alleging it was under the "corporate control" of its partner the BBC, Young went back on the decision saying it had been based on "an error in the information I received".
"Happily, the festival is now back on our itinerary and we look forward to playing! Hope to see you there!" the US-Canadian wrote on his website.
Organisers gleefully announced that he and his band The Chrome Hearts would now headline at the Pyramid stage during the June music fest.
"What a start to the year! Neil Young is an artist who's very close to our hearts at Glastonbury," festival co-organiser Emily Eavis wrote on Instagram.
"He does things his own way and that's why we love him. We can't wait to welcome him back here to headline the Pyramid in June."
The 79-year-old musician, who was once one of the line-up of the supergroup Crosby, Stills, Nash & Young, had alleged earlier that the BBC "wanted us to do a lot of things in a way we were not interested in", without specifying.
Young, who last played Glastonbury in 2009, had said the festival was "a corporate turn-off, and not for me like it used to be".
The full official line-up for the world-famous festival has not been announced yet. But this year's event will see raspy-voiced British rock star Rod Stewart play the coveted legends slot.
Tickets for this year sold out within 35 minutes when they went on sale in November, with standard tickets priced at £373.50 ($471.50).
Glastonbury attracted more than 210,000 fans in 2024, hosting 3,000 performances across some 80 stages. Many of the gigs were broadcast by the BBC, which has partnered with the festival since 1997.
Glasto, as the festival is popularly known, was inspired by Britain's 1960s counterculture and hippie movements, with its first iteration as the Pilton Festival in 1970.
Glam rockers T. Rex were the first headliners. Since then, it has attracted cult status and big names, from David Bowie and Paul McCartney to Stormzy and Elton John, who played his final UK gig there in 2023.
