Montgomerie has made it clear that he wants potential European team players to enter the June 3-6 event in Newport, the venue of the 2010 Ryder Cup.
Donald, who currently lies in seventh on the world points list, said: “Hopefully it will be good practice for the Ryder Cup – I’m determined to make the team again.”
The top four on this world points list and the top five on the European points list – not already qualified from the world points list – will qualify for the biennial contest in October.
The remaining places will be decided through the captain’s three wild card picks.
A wrist injury kept Donald out of the 2008 Ryder Cup, however the Englishman contributed 5 ½ points in each of the Europeans’ 2004 and 2006 victories.
Celtic Manor chief executive, Dylan Matthews said: “We are delighted that Luke Donald has entered the tournament as we look forward to seeing the strongest playing field ever assembled for the Wales Open.”
The Wales Open champion will net £300,000 and move closer to the prestigious Ryder Cup team.