The Devon-born musician, the only person to have won the prestigious Mercury Prize twice, tops the bill at the 15th annual festival at Glanusk Park, Powys, on Saturday, 19 August.
Grammy-nominated Ryan Adams, on Sunday, and Future Islands, on Friday, have been named as the other headliners.
The festival was a sell-out last year, with about 20,000 people attending.
Festival director Fiona Stewart said: "We are beyond ecstatic to welcome PJ Harvey.
"The sheer thought of it is already giving us goose bumps," she added.
The 47-year-old, whose full name is Polly Jean Harvey, became the first woman to win the Mercury Prize, when her Stories From The City, Stories From The Sea won best album of 2001.
Ten years later, her album Let England Shake, a collection of songs inspired by conflicts around the world, won the prize.
And last year, her ninth studio album, The Hope Six Demolition Project, became her first number one in the UK album charts.
She has not played in Wales for more than 10 years and the Green Man festival, situated in the Brecon Beacons National Park, will be her only UK show in 2017.
Other acts booked for this year's festival include the two-time Mercury nominated Michael Kiwanuka, Lambchop, Conor Oberst and Angela Olsen.
Among the other prominent acts appearing are BBC Radio 6 Music's album of the year winners BadBadNotGood, as well as DJ Jon Hopkins, Field Music and Julia Jacklin.
Previous headliners have included legendary Belfast-born blues and rock singer Van Morrison, ex-Led Zeppelin frontman Robert Plant, US singer-songwriter Patti Smith, Cardiff rockers Super Furry Animals, alt-folk singer-songwriter Laura Marling, Fleet Foxes, Jarvis Cocker and Doves.
Founded in 2003, Green Man has become one of the most popular alternative festivals.
It won the 2010 best medium-sized event and 2012 best "grass roots" event at the UK Festival Awards, and 2015 best festival at the Live Music Business awards.
Singer-songwriter PJ Harvey has been unveiled as the headline act for the 2017 Green Man festival.