Clarke will line up alongside Richie Porte, Rohan Dennis and a fourth rider that is still to be chosen from either the track or mountain bike squads for the 256.4km road race.
Gerrans was forced to pull out of his third Olympic Games after he suffered a broken clavicle following a high-speed fall at the 2016 Tour de France.
"Once again selections have not been easy given the high level of abilities across our reserve list,” said road cycling head coach Brad McGee.
“In calling up Simon to replace Gerrans we look forward to utilising his previous experience and race craft abilities that were highly considered in the first round of selections.
“He has firsthand knowledge of the course and presents himself fit and ready to go.
“We have no doubt he will combine very well with the team and this will be essential on such a demanding course."
Clarke, who rides for the Cannondale-Drapac World Tour squad, will compete at the Clasica San Sebastian event on 30 July before flying out to Rio.