The Swiss great, a four-time Olympian, says "at the end of the day my heart decided I would love to play at the Olympic Games again."
Federer made the announcement in Tokyo during at an exhibition event for his Japanese uniform supplier.
Federer will turn 39 shortly after the Olympic tournament. He had previously planned his schedule up to Wimbledon, which ends two weeks before the Tokyo Games.
Federer won doubles gold for Switzerland with Stan Wawrinka at the 2008 Beijing Olympics and silver in singles at the 2012 London Games at Wimbledon.
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