The 91-year-old actor, who played chimney sweep Burt in the original 1964 film, revealed he had agreed to join the cast of the new movie, which stars Emily Blunt in the lead role, according to the Hollywood Reporter.
He told the magazine: "This one supposedly takes place 20 years later and the kids are all grown up.
"It's a great cast - Meryl Streep, Angela Lansbury and that guy (Lin-Manuel Miranda) from Hamilton."
Van Dyke said while he is "choosy" about his roles, he has no plans to retire from performing.
"I think it's the worst thing you can do," he told the Hollywood Reporter.
"Certain people who do retire suddenly age. I think you have to stay active."
Blunt, 33, will replace Julie Andrews as the magical nanny in Mary Poppins Returns, which is due to be released on Christmas Day 2018.
The film - based on PL Travers' famous character - tells the story of an older Jane and Michael Banks and Michael's three children, who are visited by Poppins in the aftermath of a "personal loss" in Depression-hit London.
Miranda, the creator and star of the hit Broadway musical Hamilton, will play street lamplighter Jack in the film.
According to Variety, Streep is playing Poppins' cousin Topsy, while Lansbury's role in the movie has not been confirmed.
The film's director is Rob Marshall, whose previous work includes Chicago and Into The Woods, while the script is being produced by Finding Neverland writer David Magee.