Dunga will take charge of the squad, which is made up of mostly under 23-year-old players, as Brazil bids to win the gold medal in soccer for the first time, the O Globo newspaper reported Friday.
Brazilian soccer federation president Ricardo Teixeira made the decision during a visit to Switzerland to attend the ceremony where FIFA confirmed Brazil as the host of the 2014 World Cup, O Globo said.
Dunga's appointment has not been officially announced, but he told O Globo that his selection "shows the confidence that the CBF has in our work.
Dunga said his work as Olympic coach won't interfere with the bid to qualify for the 2010 World Cup.
He said Alex Silva, Anderson, Carlinhos, Marcelo, Cassio, Lucas, Denilson, Rafael Sobis were likely to make the Olympic squad. He also singled out Breno, Lulinha and Alexandre Pato as being promising.
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