The 16-year-old, who became the club's youngest ever scorer with his maiden strike against Osasuna last month, gets the nod ahead of Lionel Messi, who returns to the squad after several weeks out injured.
At 16 years and 322 days, Fati is around two months younger than the previous record holder Bojan Krkic was when he made his Champions League debut in 2007.
Should he score against Dortmund, the Guinea-Bissau talent would become the youngest player ever to score in the competition, overhauling a 22-year-old record held by former Olympiakos player Peter Ofori-Quaye.
Messi, who has missed the beginning of the season with a calf injury, will start on the bench against Dortmund.
Coach Ernesto Valverde said Monday that he would decide spontaneously whether or not to let Messi play.
"He has trained two or three times and made a good impression. We will see," said Valverde.
Tuesday's game marks the beginning of a gruelling Group F campaign for Barcelona and Dortmund, as they look to qualify ahead of Inter Milan and Slavia Prague.