Organisers have said the 3x3 basketball and wheelchair basketball competitions would be played under a huge canopy next to the council house – with space for up to 3,000 fans.
It would be the first time the three-person basketball would feature at a games.
Hosting the basketball in the city centre is a part of the bid team's planned 'urban street festival'.
This promises to 'celebrate urban street sport activity – sport without boundaries, music, lifestyle, and a healthy legacy. Activities will include free running, skateboarding, BMX, street dance and sport climbing.'
Birmingham is bidding to host the 2022 Games and faces competition from Liverpool, Kuala Lumpur, Victoria in Canada and possibly an Australian bid.
Ian Ward, chairman of the Commonwealth Games Bid Company, said: “Birmingham is synonymous with its urban structure with its streets and buildings a patchwork of the region’s industrial and manufacturing heritage, filled with a diverse and dynamic community.
"It made sense to recognise this within our bid through the inclusion of urban sport in the heart of our city.
“We are really excited about bringing 3×3 basketball to the Games and enhancing our sports programme through the parallel urban street festival.
"This will help leave a legacy of inspiring a new audience to engage with sport and activity.”
Former Olympic basketball champion Hakeem Olajuwon, who now lives in Birmingham, said: "My family moved to Birmingham when my daughter came to study at university here.
"We have received a fantastic welcome and love the warmth and inclusivity of everyone we have met.
"I have been amazed at the passion and ability of the young players at the City of Birmingham Basketball Club in Nechells and think the inclusion of 3×3 basketball at the Birmingham 2022 Commonwealth Games would provide a huge inspiration for the next generation of players.
“Basketball promotes courage, teamwork and how to succeed which are great values for youngsters to learn, whatever their background.
"I’m supporting Birmingham 2022 and hope they bring the Games to this great city.”