The Wasps lock injured his elbow in England's 18-11 win against Italy but he has improved to retain his place in a side that features four changes for the RBS 6 Nations title decider.
Tom Croft will start at blindside flanker in only his seventh appearance since returning to action after recovering from a broken neck that almost left him paralysed.
Croft has replaced James Haskell, Joe Marler has reclaimed the loosehead prop position from Mako Vunipola and England will start with Owen Farrell and Ben Youngs at half-back.
Farrell missed the game against Italy with a thigh strain but he was passed fit on Monday and returns to the side in place of Toby Flood, with Youngs replacing Danny Care at scrum-half.
England head coach Stuart Lancaster said: "We have come a long way through the QBE series and the Six Nations and we want to finish well on what will be a fantastic occasion in Cardiff."
Launchbury has developed into a key figure for England this season and he was given until Thursday morning to prove his fitness, after hyper-extending his elbow against the Azzurri.
For the most important team announcement of his tenure, Lancaster's biggest decision was in the back row and he has opted to fast-track Croft back into the starting line-up.
Croft's last start for England was exactly 12 months ago. In April of last year he suffered a triple break to the C6 vertebra and a burst disc when he mistimed a routine tackle on Harlequins number eight Nick Easter.
The Leicester flanker was told later that he had come as close to being paralysed as it was possible to be but he made his comeback for the Tigers on January 4.
After being given medical clearance to play every week, Croft was immediately recalled by England and he came off the bench against Italy.
He will bring a more mobile, athletic dimension to the England back row than the more physical Haskell, who is primed to win his 50th cap off the bench.
"Tom's extra lineout presence will hopefully give us an advantage. He is clearly a quality player and he has had a great impact since he has come back into the team," Lancaster told RFU.com.
"I see it as an 80-minute game. James Haskell's impact coming off the bench will serve us better."
Lancaster took the same approach to his decision to start with Marler and use Mako Vunipola as a high-impact replacement.
"Both props will play a big contribution. We believe Joe will give us the solidity in the scrum and then as the game wears on Mako will come on and do his thing."
Although Flood kicked all of England's points against Italy and did little wrong, Farrell has reclaimed the fly-half jersey after shaking the thigh injury he sustained against France.
The Saracens fly-half did not enjoy his best day against Les Bleus but he will bring control and defensive ferocity which England will need in the cauldron of the Millennium Stadium.
"Clearly Wales will target that area and they will be coming down that channel and I am sure Owen will be ready for some work. We have got a big challenge coming our way but we will be ready for it," Lancaster said.
Farrell and Youngs managed the game expertly against Ireland in Dublin earlier in the tournament and Lancaster will want them to replicate that performance.
England are chasing their first Grand Slam in a decade but Saturday's clash is a genuine title decider, with Wales capable of retaining their crown.
Lancaster is yet to lose an away game in the Six Nations and he believes those experiences and the memory of beating New Zealand at home in December will stand his men in good stead.
"When you look at this Welsh side, there are not many weaknesses," Lancaster said.
"It will take an outstanding effort but we have done it before, we have been to away games and won. We have played the best side in the world at home and won.
"We have to deal with the occasion and play with composure and accuracy. There is a quiet self-belief."