The 27-year-old all-rounder made his England debut against India in Chennai last December and joins Worcestershire's Moeen Ali in an England team which will feature two spinners in a Lord's Test for the first time since 1993.
Middlesex seamer Toby Roland-Jones is the player left out of the 12-man squad to accommodate Dawson, a right-handed batsman and left-arm spinner.
"Liam is going to play," Root said on Wednesday ahead of his first test since he succeeded Alastair Cook as England captain in February.
"Liam's character is exceptional - the way he bowled in India and so far this season has been brilliant. He'll bring us a lot of control and a bit of depth in our batting as well.
"Toby is the unfortunate one to miss out but he's really impressed everyone with the way he has gone about his business."
The four-match series starts at Lord's on Thursday before the teams meet at Trent Bridge, The Oval and Old Trafford.
(Reporting by Pete Hall; Editing by Julian Shea)
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