Defending champion Djokovic, who retained his Paris Masters title on Sunday after beating Milos Raonic, will also face Australian Open champion Stanislas Wawrinka and hard-hitting Czech Tomas Berdych in Group A of the elite event staged at London’s O2 Arena.
Djokovic takes a 27-match indoor winning streak into the tournament and Cilic, who is making his debut at the eight-man event, has not beaten the Serb in 10 previous encounters.
“It is going to be very difficult but very exciting,” Cilic told the BBC. “I hope it is going to be an absolutely amazing experience, to play there for the first time. I have watched it on TV for so many years.
“Any of the matches could be a grand slam final so it is satisfying to play in it.”
Second seed Roger Federer, who has won the year-ending tournament six times and who still has hopes of replacing Djokovic on top of the rankings before the end of the year, faces a clash in Group B with home favourite Andy Murray.
Murray, a three-times semi-finalist in London, and Federer have contested some titanic battles during their careers and there is very little to separate the two as they can both boast 11 wins apiece.
Former Wimbledon champion Murray, who won three titles in the past six weeks to secure a place at the tournament after slipping down the rankings, missed last year’s tournament because of back surgery.
Debutants Raonic, the first Canadian singles player to qualify for the showpiece event, and Japan’s Kei Nishikori, the first Asian-born man to qualify, complete the group.
World number three Rafael Nadal of Spain is missing because of surgery for appendicitis.
The lucrative tournament gets underway on Nov. 9.
(Reporting By Michael Hann; editing by Martyn Herman and Pritha Sarkar)