Team boss Fausto Gresini said last week "the only certainty" was that his team would not compete following Simoncelli's death in a crash at the Malaysian Grand Prix.
However, Gresini has since had a change of heart and announced that Hiroshi Aoyama will take part in the Moto GP event, while Michele Pirro and Yuki Takahashi will race in Moto2.
Gresini said: "The decision to participate was not an easy one, but we have made this choice as it is what Marco would have wanted.
"Going out on track at Valencia is definitely the best way to honour him by doing what he most loved to do; ride and experience the world of MotoGP.
"This is why I believe that the best show of affection that we can make to Marco is by lining up our teams and riders for this race.
"'Super Sic' will be present in the hearts of Hiroshi Aoyama, Michele Pirro and Yuki Takahashi, and I am sure that they will give him a most fitting tribute with their performances on Sunday."