The race is scheduled for Sunday, Feb. 24, at Daytona International Speedway.
Franco will give the famed starting command, "Drivers start your engines." He will also participate in pre-race ceremonies and ride in one of the grand marshal cars during the pace laps before the green flag of the 200-lap, 500-mile race.
The 34-year-old actor is the star of Disney's "Oz The Great and Powerful," which is slated for release March 8. The film also stars Mila Kunis, Rachel Weisz and Michelle Williams. Franco's other credits include "127 Hours," the "Spider-Man" trilogy, "Milk" and "Rise of the Planet of the Apes."
Franco joins a star-studded list of previous Daytona 500 grand marshals including John Travolta, Ben Affleck, Nicolas Cage, Kate Upton, Jane Lynch and Matthew McConaughey.