Talackova has been handed grand marshal duties for the annual event, which will wind its way through the city's downtown on Aug. 5.
Talackova made international headlines when was disqualified from the Miss Universe Canada Pageant because she wasn't born a woman.
The 23-year-old teamed up with high-profile American civil rights lawyer Gloria Allred to fight what she argued was a discriminatory clause in the pageant's rules.
The decision to exclude her was overturned after pageant owner Donald Trump intervened. Upon her return to the pageant, Talackova joked Trump's hair was good enough to be in the pageant.
She didn't advance to the worldwide competition, but she finished in the Top 12 of the Canadian pageant and was one of four contestants crowned Miss Congeniality.
Talackova has said she always felt like a woman and began taking hormone therapy at 14 years old, eventually having sexual reassignment surgery at age 19.
Now, the transgendered Vancouver native says she sees herself as an advocate for equal rights.
She will be sharing her grand marshal duties in the decades-old parade with Bill Monroe, a well-known Vancouver gay activist and organizer for gay sports.
In a symbolic move, another popular and respected gay community leader, David Holtzman, will also be a grand marshal in spirit.
Holtzman died of a heart attack while on vacation in Palm Springs in April.