O'Neill gets his chance after the withdrawal of Lions centre Rob Henderson because of a shin injury.
The uncapped O'Neill was part of the Munster side defeated by Leicester in Saturday's Heineken Cup final in Cardiff.
His inclusion in the Irish squad will surprise some as Jason Holland and Mike Mullins appeared to be favourites to replace Henderson.
Lions lock Malcolm O'Kelly remains another doubt for Ireland after pulling out of Saturday's charity match between an Ireland XV and a Ballymena's President's Selection because of shin splints.
O'Kelly pulled up in training with the shin problem at an Irish squad session on Friday.
O'Kelly has been told to rest but he faces a race against time to be ready for Ireland's departure for New Zealand on 1 June.
Irish coach Eddie O'Sullivan has already been robbed of eight men who would have been in contention for a place in the squad.
Backs Kevin Maggs, Denis Hickie, Shane Horgan, Anthony Horgan, Jonathan Bell were ruled out by injury while Kieron Dawson, Jeremy Davidson and Emmet Byrne also couldn't be considered.
If O'Kelly is forced to withdraw from the tour, Trevor Brennan will be favourite to take his place in the Irish squad.
Leo Cullen would be another contender, but Brennan had an outstanding game in the Irish XV's 68-40 win at Eaton Park on Saturday.