But there was a bitter blow for former World and European 800m bronze medallist Jenny Meadows, who was omitted from the team after an injury-ravaged season.
The 34-year-old Chambers is included after the British Olympic Association's policy of life bans for drug cheats was overturned.
Chambers served a two-year ban after testing positive for THG in 2003, but became eligible again when the World Anti-Doping Agency overruled the BOA's policy.
He won the 100m trials in Birmingham with a time of 10.25 seconds and was rested for the European Championships in Helsinki last week, competing only in the relay, in which Britain dropped the baton.
He said: "It is a real honour to be selected as part of Team GB today. For me representing my country in an Olympics is a privilege that should never be taken for granted. To be given the opportunity to do so in my home town has been a dream that at times has seemed very distant and is now a reality.
"It is now my responsibility to prepare fully for the 100m, the relay, to support all my fellow athletes and all my other colleagues within Team GB. It is a very proud day and I thank the selectors for the confidence and faith they have placed in me."
Another former drug cheat, Carl Myerscough, competes in the shot put.
Head coach Charles van Commenee sprung a major surprise selecting Lynsey Sharp for the women's 800m.
Sharp, 21, won the recent GB trials and claimed silver at last week's European Championships in Helsinki.
However she has not achieved the A qualifying standard - meaning that, by selecting her, Van Commenee limited himself to just one pick in the event under IAAF rules.
2009 world medallist Meadows, who has not run since last September due to injury, has been excluded, as has Emma Jackson, who has the A standard but is battling a rib complaint, and current British number one Marilyn Okoro.
Meadows has already indicated she will appeal the decision while Okoro, who is named in the 4x400m relay team, tweeted: 'I'm quitting'.
Among the leading medal hopes in the GB squad are Mo Farah in the 5000m and 10000m, Dai Greene in the 400m hurdles, and heptathlete Jessica Ennis.
Ennis said: "I am really excited to have made my first Olympic team, and cant wait to compete in London on the 3rd and 4th August in front of a home crowd. I have been training really hard and feel in great shape and am really looking forward to competing - I know the atmosphere will be amazing!"
Great Britain will have representation in all but four events - the women's high jump, discus and shot and 4x100m relay.
BRITISH ATHLETIC TEAM - MEN
100m - Adam Gemili, Dwain Chambers, James Dasaolu
200m - James Ellington, Christian Malcolm
400m - Martyn Rooney, Conrad Williams, Nigel Levine
800m - Andrew Osagie, Michael Rimmer
1500m - Andrew Baddeley, Ross Murray
5000m - Mo Farah, Nick McCormick
10000m - Mo Farah, Chris Thompson
110m hurdles - Andy Pozzi, Lawrence Clarke, Andy Turner
400m hurdles - Dai Greene, Jack Greene, Rhys Williams
3,000m steeplechase - Stuart Stokes
4x100m relay - Chambers, Gemili, Dasaolu, Ellington, Malcolm, Danny Talbot, Mark Lewis-Francis, Simeon Williamson
4x400m relay - Rooney, Williams, Levine, Richard Buck, Luke Lennon-Ford, Rob Tobin
High Jump - Robbie Grabarz
Long Jump - Greg Rutherford, Chris Tomlinson
Triple Jump - Philips Idowu
Pole Vault - Steven Lewis
Javelin - Mervyn Luckwell
Hammer - Alex Smith
Discus - Lawrence Okoye, Abdul Buhari, Brett Morse
Shot - Carl Myerscough
Decathlon - Daniel Awde
Marathon - Scott Overall, Lee Merrien, Dave Webb
50km walk - Dominic King
100m - Abi Oyepitan, Anyika Onuora
200m - Oyepitan, Margaret Adeoye, Onuora
400m - Christine Ohuruogu, Shana Cox, Lee McConnell
800m - Lynsey Sharp
1500m - Hannah England, Laura Weightman, Lisa Dobriskey
5000m - Julia Bleasdale, Jo Pavey
10000m - Julia Bleasdale, Jo Pavey
100m hurdles - Tiffany Porter
400m hurdles - Perri Shakes Drayton, Eilidh Child
3000m steeplechase - Barbara Parker, Eilish McColgan
4x400m relay - Ohuruogu, Cox, McConnell, Marilyn Okoro, Nicola Sanders, Emily Diamond
Long Jump - Shara Proctor
Triple Jump - Yamile Aldama
Pole Vault - Holly Bleasdale, Kate Dennison
Javelin - Goldie Sayers
Hammer - Sophie Hitchon
Heptathlon - Jessica Ennis, Katarina Johnson-Thompson, Louise Hazel
Marathon - Paula Radcliffe, Mara Yamauchi, Claire Hallissey
20km walk - Jo Jackson