The 20-time Grand Slam winner said last week he would retire at the team event, which starts at the 02 on Friday.
He has struggled with a knee problem and does not feel able to play singles.
"It's an event I don't want to mess with, but I know my limitations," said the 41-year-old Swiss, who hopes to pair up with old rival Rafael Nadal.
Italian Matteo Berrettini, the first alternate for the team tournament, will then take Federer's place over the weekend.
Federer's last competitive match was a defeat by Hubert Hurkacz in last year's Wimbledon quarter-finals.
Europe take on a world team in the three-day Laver Cup, where the six players from each side are usually required to play at least one singles match.
"I asked [Europe captain] Bjorn [Borg] if I could play one doubles, on Friday night, then Matteo comes in," Federer told a news conference.
"I'm nervous, I haven't played in so long."
His swansong could see a link-up with Spanish great Nadal.
"It is clear that the most beautiful thing would be to play doubles here with Nadal, because it has been my great rivalry," he said.
Federer told BBC Sport: "I want to play at a level that is also OK for me but also for the fans and the event, also enjoy myself but at the same time I want to try my best and to soak it all in.
"Eurgh, it's going to be very different this next 48-72 hours but I want to look forward to it, I signed up for it and I wanted to - when I announced it - be around.
"I wanted to not just put out the news and be a ghost, I didn't want that, I wanted to be around.
"At the Laver Cup I have a wonderful platform being surrounded by everybody and feeling like it's a party."
Novak Djokovic, Andy Murray, Casper Ruud and Stefanos Tsitsipas are also on Team Europe, who will face a world team of Taylor Fritz, Felix Auger-Aliassime, Diego Schwartzman, Alex de Minaur, Frances Tiafoe and Jack Sock.
Friday's afternoon session of two singles matches is followed in the evening by another singles match and a doubles match.
Federer said he was most proud of his longevity and that retirement in London made sense as it had been "perhaps the most special place" in his career.
"You don't need all the records to be happy, I can tell you that," the eight-time Wimbledon champion added.
The Swiss earlier told BBC Breakfast the decision to retire came after he "stopped believing" he could continue playing because of injuries.
"I knew I was on very thin ice for the last year, ever since I played Wimbledon," he said.
"I tried to come back but there was a limit to what I could do."
-- Courtesy of BBC Sport