Brescia forward Baggio, 37, announced last December that he would retire from the game at the end of this season.
"Baggio will play in the next game," Italy coach Giovanni Trapattoni told the television programme Porta a Porta.
"I have spoken with him. It is a rightful recognition of a charismatic footballer," added the Italy coach.
Italy will play Spain in Genoa on April 28.
Baggio has played 55 times for his country since making his debut against the Netherlands in 1988 and scored 27 goals.
He helped Italy reach the final of the 1994 World Cup but famously missed a penalty in the shoot-out, handing Brazil victory.
Baggio has not played for Italy since a European championship qualifier against Belarus five years ago.
He said it had been a tough decision to retire from the game.
"It was a painful choice but one that everyone has to deal with and I have to accept it," he told Porta a Porta.
"I'm trying to cope with it but it is not easy," he added.
Italy have been drawn in Group C for June's European championships alongside Bulgaria, Denmark and Sweden.
