The Lions could play their first "home" match in 16-years next summer ahead of their tour of South Africa.
Cardiff's Principality Stadium and Dublin's Aviva Stadium had also been considered after the RFU's decision not to hold the fixture against last year's World Cup hosts at Twickenham.
The Lions' last non-tour fixture was against Argentina ahead of the 2005 series with the All-Blacks and the home unions are hopeful that the game in Edinburgh could generate around £5million.
That income would help to offset the costs of Warren Gatland's side trip to face the world champion Springboks a month later.
They'll play three tests against South Africa across July and August and will also face The Stormers, Bulls, Sharks and two other representative sides on the tour.
Meanwhile Springboks wing Cheslin Kolbe has revealed that he's likely to opt to play for South Africa in the series rather than travel with their 7s side to the Olympics.
“It’s a tough decision but I would definitely choose taking on the British and Irish Lions," he told Planet Rugby.
“Although I would love to play Sevens for my country at the Tokyo Olympics, to be part of a British and Irish Lions series is a goal I really want to achieve and I would like to be a part of that because it only happens every 12 years."
Everyone’s in the Team Of Us.
Vodafone. The Official Sponsor of the Irish Rugby Team.