The adaptation of Ian McEwan's novel, also starring Vanessa Redgrave and James McAvoy, will be a contender for the event's top prize, the Golden Lion.
Atonement is the second release from UK director Joe Wright, 35, who worked with Knightley on Pride & Prejudice.
The world premiere of the film, a tale of love and war, will be attended by Knightley, 22, in Venice on 29 August.
Festival head Marco Muller said: "For the first time in its history, the opening film is the work of a young director."
"It is a film that, in terms of emotive and visual power, is greater than some of the major films of many acclaimed directors," he added.
Wright described the honour as "extraordinary".
"Going to the Venice Film Festival is something one dreams of. It is just steeped in history," he said. "I keep imagining I'll bump into Sophia Loren."
Oscar contender
Pride & Prejudice, which marked Wright's film debut, picked up four Oscar nominations in 2006 including a best actress nod for Knightley.
"She's developing as an actress all the time and I think her performance here is the best thing she has ever done," said Wright, commenting on Knightley's performance in Atonement.
The film is already being touted as an Oscar contender, with selection for Venice expected to bolster its chances.
"Opening Venice is a prize in itself," said Wright, who refused to be drawn on the film's awards potential.
Recent winners of the festival's Golden Lion include Vera Drake and Brokeback Mountain.