The Atletico Madrid striker was substituted late in their 3-2 semi-final defeat to the Netherlands because of an injury. There were some doubts on his availability for the match against Germany, but it has now been confirmed that the forward will feature for the Celeste.
Forlan has scored four times in the World Cup so far, just one fewer than Netherlands midfielder Wesley Sneijder and Spain striker David Villa.
Uruguay coach Oscar Tabarez confirmed his talismanic striker was ready to play on Saturday but would do so with the team coming ahead of personal accolades.
"Yes, he's ready, but that doesn't mean he's only going to play to place first in the top goalscorers standings," Uruguay coach Oscar Tabarez has been quoted by AFP as saying. "We absolutely want to win this match and it's a collective effort.
"There are lots of good things to say about Diego.
"He's much more than just an excellent footballer and a great professional; he's there in the big matches.
"They're (Germany) a marvellous opponent. They belong to the history of the World Cup, having playing at every finals since 1954 and being three-time world champions.
"It's very motivating to meet one of the best teams of the tournament, who play with lots of young players. But it's not impossible, just as it wasn't impossible against the Netherlands."
Tabarez also named his starting line-up against the Europeans:
Fernando Muslera - Martin Caceres, Diego Lugano, Diego Godin, Jorge Fucile - Maxi Pereira, Diego Perez, Egidio Arevalo Rios - Edinson Cavani, Diego Forlan, Luis Suarez