Matthews crashed during the February 24 Omloop Het Nieuwsblad in Belgium and had to pull out of the Tirreno-Adriatico stage race.
"We go into the first Monument of the season with Michael as our team leader," Team Sunweb coach Marc Reef said. "We're happy he's back after fracturing his shoulder at Omloop Het Nieuwsblad.
"His fracture has been healing well and he has been able to do some high-quality training over the past week.
"Despite losing Simon [Geschke] as a key support rider with a fractured collarbone sustained during Tirreno Adriatico and Søren [Kragh Andersen] who is still struggling with sickness, we line up with a very strong team ready to tackle a tough final on Saturday.
"Also back in action after crashing out of Tirreno Adriatico is Tom [Dumoulin], and he will be one of the key support riders for the final. Roy [Curvers] is our road captain and starts his seventh Milano-Sanremo, so we have an experienced guy to lead the team. After a really tough week, we remain positive and look forward to the first Monument of the season."
Milan-San Remo, the first of the five big annual one-day races known as cycling's monuments, is a major career goal for Matthews.
Another Australian likely to make their mark are Caleb Ewan (Mitchelton-Scott) who will be anxious to improve on his 2017 top-ten.
“Last year I managed to get over the Cipressa and the Poggio in the front group and I was feeling good on the climbs and happy to finish in the top ten on my first appearance and if you’re to stand any chance of winning you have to be in a good position over those two last climbs," Ewan said.
“It’s a long race, at nearly 300 kilometres and most of my training lately has been geared towards getting through a race of that length and having enough left to be competitive at the end.
“Having done the race last year I know what to expect. I’m another year older, I’ve got another season in my legs and in 2017 I had to abandon Tirreno-Adriatico early on with sickness and didn’t get the benefit of going deeper into the race.
“We have a really strong team for the race, it’s the only monument that a sprinter can win and ever since I turned professional it’s a race that I wanted to take part in and to try and win.”
Other Australians starting Milan-San Remo include Heinrich Haussler (Bahrain-Merida), Nathan Haas (Katusha-Alpecin), former winner Simon Gerrans (BMC), Mat Hayman (Mitchelton-Scott), Mark Renshaw (Dimension Data) and the EF Education First-Drapac trio of Simon Clarke, Will Clarke and Mitch Docker.
He joins the top three from 2017, including defending champion Michał Kwiatkowski (Sky), Peter Sagan (BORA-hansgrohe) and Julian Alaphilippe (Quick-Step Floors) plus a host of classics specialists among the 25 teams who hope to win the 291km race.
The race will follow the classic route that has connected Milan to the Riviera di Ponente for the past 109 years, namely via Pavia, Ovada and Passo del Turchino, before descending towards Genoa Voltri.
From here, the route heads west, passing through Varazze, Savona, Albenga, Imperia and San Lorenzo al Mare where after the classic sequence of the three “Capi” - Capo Mele, Capo Cervo and Capo Berta – the peloton then negotiates two climbs that have become part of the route in recent decades, the Cipressa which is 5.6km long with a gradient of 4.1 per cent and the Poggio di Sanremo.
The ascent of Poggio di Sanremo starts 9km before the finish line. The climb is 3.7km long with an average gradient of less than 4 per cent and a maximum of 8 per cent in the segment shortly before the crest of the climb.
The road is slightly narrower, with four hairpin turns in the first 2km. The descent is extremely technical, on asphalt roads, narrow at points and with a succession of hairpins, twist and turns.
The final part of the descent enters urban Sanremo and the last 2km are on long, straight urban roads. 850m from the finish line there is a left-hand bend on a roundabout. The last bend, leading into the home straight, is 750m from the finish line.