The annual competition will see a European side take on the best of Asia in a Ryder Cup-style event with eight players from each side taking part.
Six players will be chosen from each tour's Order of Merit and world rankings with the remaining two places left to the captains and the Spaniard is relishing the opportunity to skipper the Europeans.
He said: "I'm delighted to captain the European team in this historic first edition of the Royal Trophy. I believe it will grow into one of the world's great sporting competitions.
"Many of the great moments in my career have happened at the Ryder Cup. As a player and captain these are truly unforgettable moments.
"We will have a great team representing Europe," he said. "This is our pride and competitive spirit on the line."
The first five years are expected to be played in Bangkok with the event alternating between Europe and Asia afterwards.
The eligibility process will be completed on December 12 with the captain's picks to be announced one week later.
