Read broke his thumb in late April and has not played since. He had surgery and the protective cast was removed two weeks ago.
The 31-year-old also had a late start to Super Rugby with the Canterbury Crusaders as he recovered from wrist surgery.
Centre Ryan Crotty has also recovered from a rib injury and replaces Anton Lienert-Brown in a midfield partnership with Sonny Bill Williams.
"They've both been on target to return for this game all the way through, are both in great shape and, together with the rest of the squad, they're really excited at what's ahead of us," All Blacks coach Steve Hansen said in a statement on Thursday.
Ioane was something of a surprise to make his first start on the wing for the All Blacks, given Savea's phenomenal strike rate and virtual first-choice status since making his debut in 2012. He has scored 46 tries in 53 tests.
Hansen said the 20-year-old had earned his spot after showing superb form for the Auckland Blues this season. It will be the third time he has faced the Lions on tour, having also played for the Blues and Maori All Blacks.
"His outstanding form throughout the season this year, including against the Lions, has earned him his start on the wing," Hansen said.
The side was otherwise as expected from the one that beat Samoa 78-0 last Friday, with Ardie Savea shifting to the bench to make way for Read.
Flyhalf Aaron Cruden, who suffered a knee injury in the Waikato Chiefs' last Super Rugby game, has been bracketed with Lima Sopoaga on the replacements' bench and is likely to need to pass a late fitness test to take his place.
All Blacks: 15-Ben Smith, 14-Israel Dagg, 13-Ryan Crotty, 12-Sonny Bill Williams, 11-Rieko Ioane, 10-Beauden Barrett, 9-Aaron Smith, 8-Kieran Read (captain), 7-Sam Cane, 6-Jerome Kaino, 5-Sam Whitelock, 4-Brodie Retallick, 3-Owen Franks, 2-Codie Taylor, 1-Joe Moody.
Replacements: 16-Nathan Harris, 17-Wyatt Crockett, 18-Charlie Faumuina, 19-Scott Barrett, 20-Ardie Savea, 21-TJ Perenara, 22-Aaron Cruden/Lima Sopoaga, 23-Anton Lienert-Brown
(Reporting by Greg Stutchbury,; Editing by Ed Osmond)
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