Williams, one of the most successful athletes in world sport, will further stake his claim as a champion of both rugby league and union with a likely gold medal at the games.
The Kiwis chances are further bolstered with All Black Liam Messam, Blues forward Akira Ioane and Hurricane Ardie Savea also named in the squad which will be captained by Scott Curry.
The Kiwi sevens coach Gordon Tietjens was excited by the addition of Sonny Bill to the squad.
"Sonny Bill Williams is a great athlete and has shown he can adapt very easily to the demands of rugby," Tietjens said.
"I see him adjusting very well to the fast pace of sevens.
"He'll be a great attacking weapon with his speed, strength and uncanny ability to offload.
"We're really pleased he's committed to the full season. He knows competition for places will be intense so he's giving himself the best chance of making the team for Rio."
Full All Blacks sevens squad:
Dylan Collier (Waikato)
Scott Curry (Bay of Plenty)
Sam Dickson (Canterbury)
DJ Forbes (Counties Manukau)
Gillies Kaka (Hawke's Bay)
Akira Ioane (Auckland)
Rieko Ioane (Auckland)
Ben Lam (Auckland)
Liam Messam (Waikato)
Tim Mikkelson (Waikato)
Ardie Savea (Wellington)
Sherwin Stowers (Counties Manukau)
Sam Vaka (Counties Manukau)
Beaudein Waaka (Taranaki)
Joe Webber (Waikato)
Sonny Bill Williams* (Counties Manukau)