The Melbourne-born singer and actress will perform the national anthem this year.
Twenty-eight years have passed since the four-time Grammy award winner last sang Advance Australia Fair at the 1986 Grand Final between Hawthorn and Carlton.
Two months ago, the League approached Newton-John, telling her she was the one that they wanted performing at the MCG on the final Saturday in September, and she was keen to commit.
"It was my birthday last time I did it, and my daughter was just a little girl, so it's been a while," Newton-John told AFL.com.au.
"I am very honoured to be asked to do it again, it should be fun.
"It's such a huge event, it's one of the biggest sporting events of the year in Australia. It's a bit nerve-wracking because you want to get it right, but it's exciting, there's a lot of energy from the crowd.
"Although the fans are very focused on the game, so they're probably thinking ‘Get off and get the game started!’"
Newton-John has been hopelessly devoted to Carlton since she was a little girl living around Melbourne University, and admitted she has had “the blues over the Blues” this season.
But her Melbourne roots mean she'll be hoping a Victorian-based side wins the flag this year.
The last time she sang at the Grand Final, the Hawks were victorious, and she said she might just be a good luck charm for the brown and gold should they make the final two.
Following the Grand Final, the 65-year-old will take part in The Wellness Walk on Sunday September 28, which will raise funds for the Olivia Newton-John Cancer and Wellness Centre at Austin Health.
The centre provides numerous programs and support groups such as meditation, yoga, art and music therapy for people diagnosed with cancer.
"In the first year over 10,000 people visited the centre, which is amazing," Newton-John said.
"We've got 190 group programs which shows the need that's there. There is a real need for the current support we're offering, that's why the walk is so important and the gala, to raise funds."