Also lined up for the 12 December event are long-standing trad act Blazin’ Fiddles, while the finale will see a variety of performers take the stage, including Runrig founding member Donnie Munro, Caledonia singer Dougie MacLean and singers Karine Polwart, Julie Fowlis and Ruairidh Gray.
This year will be the fifth Hoolie in the Hydro and previous editions have included a tribute to Sir Billy Connolly and a celebration of the music of Runrig.
It was founded by Gary Innes, who also plays with Mànran.
He said: “The story of Local Hero is one of people, place and belonging and that couldn’t be more fitting for these celebrations – we’ll be channelling all of that nostalgia, pride and musical artistry.
“It will be a real privilege to recognise Mark Knopfler’s incredible contribution to Scottish music here in the city of his birth, as well as celebrating our own heroes of the trad scene who have done so much to share the music and inspire new generations.”
Organisers said the event will also embark on a hunt for everyday heroes later in the year, with people encouraged to nominate those that make a difference in their community. The individuals will then be honoured on the night.