The 30-year-old will ride in the Superbike and Superstock classes for the Moneymore-based outfit.
Kneen secured a maiden rostrum in the Superstock race at the Isle of Man TT in June while riding for Penz13.com BMW and performed well at the Southern 100.
Hutchinson is recovering from a broken femur and a badly injured ankle.
The Yorkshireman sustained the injuries in a crash during the Senior TT, having won the Superbike and Superstock events on the Isle of Man earlier in the week.
Kneen finished second in all four Superbike races at the Southern 100 at Billown, including a runner-up place in the Solo Championship behind winner Dean Harrison.
The Braddan man was a winner in the Superstock class at the Ulster Grand Prix in 2014, his only international road race success to date.
"It's nice to be asked to ride for Tyco BMW and it's also nice to be given the chance on merit, because of the results I've been getting recently and how I'm riding," said Kneen.
"Things have been going well for me on BMW machinery, so that in itself should make things easier jumping onto the TAS Racing prepared Tyco BMWs."
Team manager Philip Neill commented: "With Hutchy out injured we could have taken the opportunity for a well-earned break from our hectic racing schedule, which has also seen our team members in Japan representing BMW Motorrad at the Suzuka 8-Hour last weekend.
"But we are big fans of the Ulster Grand Prix and as well as having a good record at the event, we very much enjoy bringing the whole show home to race in front of our local fans and race supporters.
"Hutchy is almost an impossible man to replace, but Dan has shown great form of late on BMW Motorrad machinery and very much deserves this opportunity at the Ulster Grand Prix."
Manxman Dan Kneen has been drafted into the Tyco BMW team to deputise for the injured Ian Hutchinson at next week's Ulster Grand Prix at Dundrod.