It was thought that Indurain's season was over when he retired from the Tour of Spain last month but after recovering from the bronchitis that had forced him out he decided to race again.
Indurain, 32, had also declined to go to this weekend's World cycling championships in Lugano, Switzerland, where he was to defend his time-trial title.
Despite his appearance on Sunday there are doubts whether the Spaniard will race again next year.
He has had a disappointing season, despite winning the Olympic time-trial, and his failure to capture a unique sixth successive Tour de France had prompted talk of his retirement.
Indurain's Banesto team are believed to have approached compatriot Abraham Olano, the reigning World road race champion, to lead the team in the event of Indurain retiring.
Riis will fork out 50,000 pounds ($78,750) from his own pocket to boost a sponsor's 25,000 pounds ($39,250) bonus for victory in the 252 kms world road race championship, three months after he gave Denmark their first Tour de France triumph.
He said: ``I will be quite happy to pay the money because they will have to work hard for me.''
Twice the Danes have taken silver medals in the professional championship, and in Sunday's race which combines professionals and the best amateurs as ``elites,'' Riis is confident of breaking the spell.
``It will be the hardest course I have ridden, but that suits me,'' he said. ``Tactics (towards the end) will not matter. This race will be down to the man with the strongest legs and if I find the strength I had in the Tour then watch out.
``I am surprised that I am in such good shape again after the Tour.''
Fifteen laps over two major climbs on the 16.8 kms circuit are expected to sort out many of the 177 starters and in the early stages top riders will be looking for help from compatriots to ensure there are no decisive breakaways.
Apart from the Danish threat Italy, France, and Switzerland are sure to give defending champion, Spain's Abraham Olano, a hard day.
``It could be a one-man show, but if there is a sprint finish then there will be only two or three contesting it,'' said French favourite Laurent Jalabert, who missed the last two championships after taking a silver medal in 1992.
France also have contenders in 1994 champion Luc Leblanc and Richard Virenque.
Virenque said: ``Those two mountains will make it very difficult and there is nowhere on the course to recover. Not many are going to last this course.''
Italian dreams of repeating Fausto Coppi's Lugano triumph of 43 years ago may rest with an in-form Gianni Bugno and Michele Bartoli.
Boosted by Alex Zuelle's victory in Thursday's world time trial championship, the Swiss will be seeking another home success with Tony Rominger, Laurent Dufaux or local hero Mauro Gianetti.
Zuelle said: ``I am ready to ride for any one of my team mates. I have my gold. Now it is their chance.''
The championship organisers are also hoping to strike it rich. They need a 40,000 attendance to offset a deficit of 800,000 Swiss francs ($638,800) on their 3.6 million Swiss francs ($2.88 million) budget.
Tests for the drug, erythropoietin (EPO), will be in place for the Winter Olympic in Nagano in 1998.
The drug, which was first introduced in the 1980's to treat kidney disease, is used by athletes who cheat in distant events.
EPO helps boost the level of oxygen in the blood, giving an athlete a increase in performance.
"It is a great drug for medical use, and a very powerful weapon for the cheats," said IOC medical commission president Prince Alexandre Merode.
"But despite the fact we can now detect EPO the war against the drug cheats is far from being won," warned the Prince.