Semenya, 21, will lead the pride of South African sport at the opening ceremony in London on 27 July.
The announcement was made at Team SA's glittering farewell banquet in Sandton last night.
Born in the tiny village of Ga-Masehlong in Limpopo, Semenya won the 800m title at the 2009 IAAF World Athletics Championships in Berlin, Germany in 2009.
More recently, she powered her way to a silver medal at the 2011 World Championships in Daegu, South Korea.
SASCOC President Gideon Sam said: "Caster is an absolute role model for all sportsmen and women in South Africa. She's proved herself to be an absolute inspiration in the face of adversity and we are sure that this inspiration will rub off on each and every member of the Olympic squad."
In Beijing, the flag bearer was Natalie du Toit, who performed the duty at both the Olympics and Paralympics and became the first woman to carry the flag at both the Olympics and Paralympics.
Sam took a captive audience through South Africa's Olympic history since re-admission in 1992 and left them in no doubt that this team is well-prepared and ready for the next Olympic leap upwards in London.
"The wheels definitely came off in Beijing where Khotso [Mokoena's] silver was our only medal, but we have learnt a lot and put in an awful amount of work since 2008 to make sure that won't happen again," he said.
Team SA will jet off to London later this evening with their locally branded South African Airways Airbus 340-300 aeroplane, which was proudly paraded in front of the Team SA at OR Tambo Airport on Wednesday.
Speaking at the banquet, Public Enterprises Minister Malusi Gigaba said to the Olympians: "Go out there to conquer the world and bring back the medals. We have given this plane the name Siyanqoba [we conquer]."
SAA Board chairperson Cheryl Carolus said: "We're ready and eager to take Team SA to battle and bring the team home with the medals."
Carolus, who last week accepted SAA's award for Best Airline in Africa, further said they were proud to hand over the vibrant and colourful and branded plane for the team.