There will be eight teams in each of the men's and women's tournaments of the half-court format, which was introduced at the 2010 Youth Olympics in Singapore.
"The dream of a path from the streets to the Olympic Games has become reality for all the basketball community," Patrick Baumann, the secretary general of basketball governing body FIBA, told ESPN.
An urban Tokyo venue for 3-on-3 basketball could be announced when the IOC executive board meets again in Lausanne on July 9-10, IOC sports director Kit McConnell told ESPN.
Other sports added to the 2020 lineup include BMX freestyle cycling, men’s and women’s madison track cycling, men’s 800-meter freestyle swimming and women’s 1,500 freestyle swimming. There also will be a 4x100-meter mixed medley relay in swimming.
Events confirmed Friday are in addition to decisions last August to include sports climbing, skateboarding, surfing, baseball and softball, and karate in the Tokyo program.