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The Canadian singer-songwriter had long been rumoured to be filling the third slot after Blur and Bruce Springsteen were announced as the other two bill-toppers at the event.
Organiser Michael Eavis said: "We give it a go and every year people come to the festival and ask the same question: 'When is Neil Young playing?' So this is big news for us.
"I've seen him play many times over the years but I think he's better than ever at the moment, it's one hell of a show.
"Neil Young to play this year is a dream come true for me personally. He is one of my all-time favourites and we have always wanted him to play."
He added: "With Neil on the bill we are close to completing our best ever lineup."
Glastonbury takes place between June 24 and 28 in Pilton, Somerset. Tickets are sold out.
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