"Venice is a window to world cinema and the opportunity to celebrate its power and cultural relevance," the Mexican director said.
The Shape of Water, a Cold War-set story of love between a mute cleaning woman and a mystery merman-like creature, has once again propelled the filmmaker into the Hollywood limelight.
The fantasy romance won the 53-year-old the best director award at the Golden Globes and has earned 13 Oscar nominations, one shy of the record held by 2017's La La Land together with All About Eve in 1950 and 1997's Titanic.
It also scooped the top prize, the prestigious Golden Lion, at last year's Venice festival.
"Guillermo Del Toro personifies generosity... a passion for the kind of cinema that can spark emotions, affect people and, at the same time, make them reflect," said festival director Alberto Barbera.
Throughout his career, Del Toro has alternated between big-budget Hollywood productions such as Blade II and more personal Spanish-language projects. In 2006, he received critical acclaim for his dark fantasy film Pan's Labyrinth, which won three Oscars.
The film festival will light up the Italian city's Biennale with international stars from August 29th to September 8th.