The race, which will be Bolt's first in Europe before the World Championships, will be shown on BBC television.
British sprinters Mark Lewis-Francis and Simeon Williamson will be among those lining up against the 22-year-old from Jamaica.
Ethiopia's Haile Gebrselassie will be bidding to regain his Bupa Great Manchester Run title on the same day.
Bolt won gold in the men's 100m and 200m at the Beijing Olympic Games in world record times and also triumphed in the 4x100 relay.He will use the event partly as a tune-up for the World Championships in Berlin in August, said: "I am very excited to compete for my first time in Manchester, my first time in a 150m race and my first time in a street race.
"I love competing in the UK, it is like my second home as I usually stay in London during the European racing season.
"When I heard about the idea I thought it would be great fun and something new and exciting. Hopefully this event will be the start of many more similar events all over the world and inspire kids to take up athletics."
A Manchester United fan, Bolt added that he had an ulterior motive for racing in the city.
"I am also looking forward to going to Old Trafford to support my team," he said. "I've wanted to come to a match for a long time and am delighted to get the opportunity."
The Manchester event will start at about 1600 BST, with the final taking place around 1800 BST and televised live as part of the BBC's Great Manchester Run highlights show on BBC Two.
It will be similar to street sprint races held in Newcastle and Gateshead last summer, while there are also plans for an international "Ashes" match between England and Australia this summer.
David Hart, communications director of event organisers Nova International, said: "In the past by definition, track and field athletics has taken place in a stadium or an indoor arena.
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