Digital Spy exclusively revealed in May that ITV would screen a special one-off live edition to mark its fourth decade in October.
Prescott directed Coronation Street's 50th anniversary live tram crash special in 2010, for which he won a BAFTA last year. Prescott also shot Corrie's live 40th anniversary edition in 2000.
Emmerdale's series producer Stuart Blackburn said in a statement: "The entire live episode is going to be shot on location at the Emmerdale village set in the Yorkshire Dales. We are aware we may be presented with one or two challenges and couldn't think of a better director to tackle them. We are delighted Tony has agreed to be part of Emmerdale's 40th celebrations."
Meanwhile, Prescott commented: "It's a great honour to be asked to direct Emmerdale's 40th anniversary episode. It is highly ambitious and will mirror the great aspirations that have made the drama so successful. This will be a celebration of all the superb art and craft that exists here in Yorkshire."
Speaking to Digital Spy last week, Blackburn divulged that the episode won't contain any stunts, but refused to rule out the possibility of returning characters. Get the Inside Soap magazine on your iPhone or iPad