The band will headline the three-day event in July, joined by acts like Floating Points, Call Super and Warpaint.
It'll be the first time the spectacular site has been used for a music festival. The xx will perform live once, with band member Jamie xx also DJing. They'll be joined by acts like Floating Points (who will DJ), Sampha, Gilles Peterson, Hunee, Benji B, Avalon Emerson, Warpaint, Kamasi Washington, Call Super and Axel Boman, who will team up with Robag Wruhme as part of a Pampa showcase. Some local artists have also been booked, including Högni, Orang Volante and Trip favourite Bjarki.
The band say they "fell in love" with Iceland during the recording of their latest album, I See You. Since that record's release, they've toured the world and hosted a seven-night residency at London's Brixton Academy. Read our review of the second Brixton show.
Tickets for this event are available here on RA.