The post-punk group have released a new single called Hawaii for the contest which is about Lydon's wife's battle with Alzheimer's.
Six different acts will compete for Ireland's spot at Eurovision during a broadcast on Irish channel RTE next month.
The winner will then represent Ireland during the contest in Liverpool in May.
The other acts Public Image Ltd will compete against are Wild Youth, Adgy, Connolly, Leila Jane and K Muni & ND.
The former Sex Pistol said of the song: “It is dedicated to everyone going through tough times on the journey of life, with the person they care for the most. It’s also a message of hope that ultimately love conquers all.”
Ireland has previously won Eurovision seven times but has not qualified for the grand final since 2018.
Ireland's Johnny Logan is the only artist to have won Eurovision twice, placing first in both 1980 and 1987 while also composing the winning song in 1992.
Thirty-seven different countries will take part in this year's Eurovision and have until the end of March to confirm their artists and songs for the competition.
The contest was originally set to take place in Ukraine but that is no longer possible following Russia's invasion.
Instead the night will be hosted by the UK with Liverpool winning a bidding contest that also included other cities such as Birmingham, Edinburgh and Manchester.
The Eurovision grand final will take place on 13 May at the M&S Bank Arena in Liverpool.
Watch below: John Lydon blasts Danny Boyle over Sex Pistols series