A sponsorship deal with the company will help bring back the city’s ice rink for the first time in three years.
The west end of George Street is expected to be transformed by the return of the ice rink and arrival of several pop-up food and drink stalls for the six-week festival.
Other major changes for this year’s festival, which launched ticket sales on Friday, include a new Santa’s Grotto in West Princes Street Gardens.
St Andrew Square Garden will be playing host to an open-air carol concert and will become home to Edinburgh’s nativity scene sculpture, which was donated to the city after artist Tim Chalk was commissioned by Sir Tom and Lady Anne Farmer.
A light installation of “cascading snowflakes” will sit alongside the traditional tree donated to Edinburgh by Hordaland, in Norway, each year.
The Lidl on Ice attraction, which is due to open on November 19, has been backed by business group Essential Edinburgh, which says this year’s festival has been designed to spread footfall wider across the city centre.
However, heritage campaigners have raised concerns about the ice rink’s possible impact on neighbouring businesses or the historic landscape on George Street.
An objection lodged with the city council by the Cockburn Association states: “It is essential that any development here respects the qualities of George Street and the World Heritage Site.”
The revival for the Christmas festival will see around 80 pop-up bars and stalls created in Prince Street Gardens, at The Mound and on George Street.
Underbelly directors Charlie Wood and Ed Bartlam said: “The team has been working tirelessly to create a bespoke Edinburgh’s Christmas programme that not only provides unforgettable memories and experiences, but also makes visitors feel safe and at ease at all times.
“It’s been a very challenging couple of years for everyone, but our proposed plans for Christmas are designed to support economic recovery throughout the capital and to help Edinburgh be together again.”
Essential Edinburgh chief executive Roddy Smith: “This year’s event has been designed to provide a much-needed boost to local business by supporting footfall throughout the wider city centre, providing more businesses with the chance to reconnect with residents and visitors to our spectacular capital city.
"We are especially pleased to support the fantastic ice rink on George Street, which I am sure will be a great hit with everyone.”
Frank Ross, the city’s Lord Provost, said: “The festive season is a very special time for our city and our communities and I’m sure this year’s programme will be warmly welcomed by residents and visitors.
“Whilst the safety of everyone remains a priority it will be fantastic to see people coming together again and enjoying Edinburgh’s Christmas this year where there really is something for everyone.
"Festive favourites like the big wheel and the Christmas market will be back and it’s great that the fun is spread out a bit further this year, with Santa Land in West Princes Street Gardens and a magical festive ice rink at the west end of George Street. It promises to be a cracking Christmas party for everyone to enjoy.”