Mendes, who has directed several blockbusters including James Bond pictures "Skyfall" and "Spectre", said he was "delighted" to be asked to preside over the worlds' oldest film festival.
This year's event will run from August 31st to September 10th.
"I'm very honoured to have been asked... I've always had a strong personal connection with Venice; as a student I worked for three months at the Peggy Guggenheim Collection way back in 1984, and my happiest film festival memory is launching 'Road To Perdition' at Venice in 2002," said Mendes, 50.
He will head up the international jury which decides the winner of the prestigious Golden Lion award for best film as well as the winner of the Silver Lion award for best director.
Venezuelan film "Desde Alla" (From Afar) won last year's Golden Lion, while Argentina's Pablo Trapero scooped the Silver Lion for crime thriller "El Clan".
Festival director Alberto Barbera said: "(Mendes') productions, whether destined for stage or screen, are able to reconcile the expectations of the most exacting critics with the tastes of a vast audience which seems to transcend all geographical and cultural boundaries."
Mendes won the Oscar for best director for his directoral debut "American Beauty" in 2000.
As well as winning acclaim for his big screen work, Mendes has directed several plays in London including for the Royal Shakespeare Company.
"I am thoroughly delighted to be coming back to the Lido this year and welcoming a wealth of international filmmaking talent," said Mendes.