The Wolverines (8-4) and Gamecocks (10-2) were selected Sunday.
It's the second trip in five seasons to the New Year's Day game for No. 11 South Carolina, which lost 31-10 to Iowa in Tampa in January 2009.
Michigan hasn't played in the Outback in 10 years. The Wolverines beat Florida 38-30 to conclude the 2002 season and faced Alabama in two previous trips to Tampa.