NASA Administrator Michael Griffin confirmed the launch date at the end of a two day Flight Readiness Review meeting at NASA's Kennedy Space Center in Florida.
"After a vigorous, healthy discussion our team has come to a decision: we're ready to go," Griffin said after the meeting. "The past two-and-half years have resulted in significant improvements that have greatly reduced the risk of flying the shuttle. But we should never lose sight of the fact that space flight is risky."
Discovery is scheduled to lift off from Kennedy Space Center just before 4 p.m. on July 13. Commander Eileen Collins will captain the mission, which Griffin said would be "test mission" designed to let astronauts try out new features added to the shuttle since missions were grounded after the Columbia crash.
Discovery also will carry 15 tons of supplies to the International Space Station.
July 13 is the start of a two-week window in which NASA could launch the shuttle should complications prevent a flight on the target day.
The NASA announcement comes days after a panel in charge of the return to flight program announced the agency had not completely met three of 15 recommendations designed to ensure the safety of the program.
The independent panel said the agency could not fully guard against damage to the shuttle from ice or debris that might become dislodged during launch and that NASA engineers have not yet figured out an effective way to repair a damaged shuttle once it is in orbit.
Investigators have concluded that foam insulation damaged Columbia's wing when it launched in January of 2003, leading to its disintegration when it re-entered Earth's atmosphere on Feb. 1.
Still, the Stafford-Covey Return-to-Flight Task Group said that NASA had made good overall progress in improving shuttle safety and recommended that plans for launch continue. The final call was made by Griffin, who has said he believes NASA has lowered damage risk to an acceptable level.
New safety precautions include measures to reduce the amount and size of possible loose debris during launch, cameras designed to record any damage to the shuttle, and space station upgrades that would allow the crew of a damaged shuttle to live there temporarily until a rescue mission could be launched.