The Glasgow band, who have just been shortlisted for the Scottish Album of the Year Award, were a largely unknown band when they were due to support Erasure at the Ross Bandstand months before releasing their multi-million selling debut album.
Alex Kapranos, the band's frontman, said: "Hogmanay is the greatest party of the year and there is nowhere in the world like Scotland to celebrate it. Just thinking about bringing in the bells in Edinburgh gets me excited. It’s going to be some night."
Franz Ferdinand, whose new album Always Ascending was released in February, have landed the headline slot for the "Concert in the Gardens" three years after appearing at the Edinburgh International Festival alongside 1970s American pop-rock outfit Sparks.
The band played two outdoors shows at the Ross Bandstand during the Edinburgh Festival Fringe in 2005.
However this year will be their first return to the city on Hogmanay since 2003 when the Concert in the Gardens was cancelled after gusts of wind ripped apart the temporary stage at the Ross Bandstand. The entire Hogmanay street party fell victim to the weather around 10.50pm.
This year's Hogmanay festival is the second to be masterminded by events firm Underbellly, one of the biggest promoters at the Edinburgh Festival Fringe, who also produce the capital's Christmas celebrations.
They have confirmed that Franz Ferdinand will be supported by new Scottish dance-pop group Free Love and English electronica outfit Metronomy. Tickets go on sale on Monday.
Directors Ed Bartlam and Charlie Wood said: "We’re super excited with the line-up for the Concert in the Gardens. It’s going to quite a party! Franz Ferdinand has had a fantastic year with Always Ascending and their first appearance at Hogmanay they’re our top choice to get the crowd going into the midnight moment!
"They will have great support too from top Scottish talent Free Love and dance-floor and festival favourites Metronomy. Edinburgh once more proves itself the best place to be for the new year.”
Donald Wilson, Edinburgh's Lord Provost, added: "Edinburgh’s Hogmanay is THE place to be to bring in the bells and with a strong Scottish musical line-up, this is going to be one of our best celebrations yet. Let headliners Franz Ferdinand ‘take you out’ of 2018 and secure your tickets now."