The second-ranked Nadal will return to Olympic Stadium, where he helped Spain win the title in 2004, to face the 26th-ranked Monaco in the opener of the best-of-five series. Fifth-ranked David Ferrer will play Juan Martin del Potro.
Nalbandian, who has been sidelined since mid-October with various injuries, will team with Eduardo Schwank in doubles on Saturday.
Nadal has won 18 straight singles matches in the competition since losing in his debut match in 2004.
"It's a tough match not only to play the first game for Argentina but also against my good friend Rafa," Monaco said Thursday at the Lope de Vega theater, site of the draw for the final. "It's a new challenge, but it definitely motivates me to be playing in my first Davis Cup final."
Monaco is only 5-7 in Davis Cup play, while Nalbandian is 22-5 in singles and 10-1 on clay. Overall, Nalbandian is 33-10 overall in the competition.
Nadal and Ferrer are a combined 25-0 on clay for four-time champion Spain.
"No match is won beforehand. Somebody has to play first and I'm going to be the first to try and win that first point for Spain," said Nadal, a six-time French Open champion who is scheduled to play del Potro in Sunday's reverse singles. "Even if I'm tired, I tried my best to arrive in the best conditions. Every point will be a difficult one."
If Argentina can get at least one point on Friday or Saturday, it is possible that Nalbandian would replace Monaco for Sunday's reverse singles match against Ferrer.
Because Nalbandian hasn't played in two months, Argentina captain Tito Vazquez decided to save the 2002 Wimbledon finalist for doubles. Schwank, who is 2-0 in doubles on clay, replaced Juan Ignacio Chela.
So far, Spain is ahead in the sleep department. Argentina's team was awakened for doping tests at 6:30 a.m. local time Thursday.
"It's a shame since it was a rest day and we didn't get to rest," Vazquez said. "It didn't seem very appropriate. They could have done it the day before at another moment, but unfortunately that's not up to us to decide."
Nalbandian, Monaco and del Potro were tested, Vazquez said.
"We all want a clean sport," Nadal said. "But the system and the way it is used leaves much to be desired."
Nadal is coming off a disappointing ATP World Tour Finals in London, where he was eliminated in the first round and said he felt less passion for the game.
Spain is playing in its sixth final since its first Davis Cup win in 2000. The Spanish also won in 2004, 2008 and 2009.
Spain beat favored Argentina without Nadal in the 2008 final in Mar del Plata. This year, it's the Spanish team that is trying to keep from being overconfident heading into the final weekend of the season.
"They gave us up for beaten before the final and we won," Verdasco said. "Both teams have a chance in the final. You still have to win it."