The 32-year-old from the Isle of Man has won 30 stages of the Tour de France, was the 2011 road world champion and is a three-times world champion in the Madison.
He twice finished Olympics disappointed before claiming silver in the then six-discipline omnium at last August’s Games in Rio, after combining track and road commitments in 2016.
Now, following the re-introduction of the two-rider Madison to the Olympic programme, Cavendish could go for gold.
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Cavendish won the 2005 world title with Rob Hayles and the 2008 and 2016 titles with Sir Bradley Wiggins.
“The Madison is my favourite track event and I’d love to represent Team GB in Tokyo 2020,” said Cavendish.
“It’s still a long way off, though, but just the news of its inclusion is great for our sport.”
The Madison was removed from the Olympic programme after the 2008 Games, when Cavendish and Wiggins finished ninth despite entering as world champions.
Cavendish was 29th in the road race at London 2012 and Tokyo would be his fourth Games.
The women’s Madison was part of the Track World Championships programme for the first time in April in Hong Kong. Now the events have been added to the Olympic programme, to give 12 track events.
Cavendish had welcomed last week’s announcement by the International Olympic Committee on Twitter and appeared to be keen to persuade Geraint Thomas to return to the track for Tokyo.
“Madison back in the Olympic Games in #Tokyo2020!! Guess I’m going to have to have another crack at it then,” Cavendish tweeted. “You up for it @GeraintThomas86? I’ll eat my words about you concentrating on the track. For old times sake.”
Thomas, a two-time Olympic champion in the team pursuit, replied: “Sounds good!! Just depends how much time I’ll have to spend with you??”
BMX freestyle has also been added to the Olympic schedule.