The sport was one of five to lose its funding, despite Great Britain winning its first Olympic badminton medal since 2004 at Rio 2016.
The appeal by Badminton England is likely to be heard in early February.
"We've had to make some tough decisions around investment for the Tokyo cycle," said a UK Sport statement.
"This is not a reflection on the progress or commitment of any of the sports or athletes affected, it's just a matter of us having to prioritise available resources towards those with the strongest medal potential as we focus on our aspirational goal to deliver more medals and medallists at Tokyo 2020."
Archery, fencing, weightlifting and wheelchair rugby also lost their funding, but unlike badminton, none of those sports achieved a medal for Team GB in Brazil this summer.
Badminton England chief executive Adrian Christy said he was "staggered" by the "incomprehensible" decision to remove the sport's funding.
Marcus Ellis, who won bronze alongside Chris Langridge in Rio, added that the decision would give young players "no chance at all" of making a career in the sport
Former Sports Minister & new BOA chair Sir Hugh Robertson told BBC Sport he had "enormous sympathy for a sport like badminton", but that the "balance (of UK Sport strategy) broadly speaking is right".
A total of £345m will be invested in 31 Olympic and Paralympic sports - £2m less than the record £347m allocated for the Rio Games.
As a result, UK Sport has set Team GB a target of winning 51-85 Olympic medals, and 115-162 Paralympic medals in Tokyo.
Britain enjoyed unprecedented success at Rio 2016, with the Olympics yielding 67 medals and the Paralympics 147.
Badminton England has formally appealed against UK Sport's decision to end financial backing ahead of the 2020 Olympics in Tokyo.