The prolific Argentina international has been out with a hamstring injury since March but is available for the pivotal meeting with City's fellow title chasers at Anfield.
The Argentina international has not featured since limping out of last month's Champions League loss to Barcelona at Camp Nou with a hamstring injury, but he is fit to feature at Anfield.
Four points separate City from leader Liverpool, with Pellegrini's men having played two games fewer, and the manager is hopeful the return of Aguero can pose problems for Brendan Rodgers' side.
"Sergio is OK. He worked all week with the squad normally, so he doesn't have any problem," Pellegrini confirmed. "It's very important [to have Aguero back]. He's a top player. It's very difficult for their defense to stop him and so it's very important for us."
Pellegrini, whose only injury absentee is set to be Matija Nastasic, maintained his belief that Sunday's match will not necessarily determine who wins the Premier League.
"It's a very big game, it's the team who are at the top of the table. Liverpool have had a great season, so this is an important game," he said. "But I don't think it will decide the title. Every game is a big game now until the end of the season.
"The biggest game is every week for me. It's important but if we beat Liverpool and lose against Sunderland and West Brom we are not going to win the title. Of course, the team that wins this game has more of a chance to win the title but if you think this is the finish of the Premier League, I think it is a mistake."