The 21-year-old FIFA World Cup winner is in a list of 80 players that will be whittled down to 50 before the final 18-man squad will be named for the tournament.
"Mbappe is on a pre-list of 80 players for the Olympic Games, produced by Sylvain Ripoll. That list will then become 50, before becoming 18 + four reserves," head of the French Football Federation Noel Le Graet told reporters.
"He has the age to be able to go [U23]. Like all the young players of his age who are talented, he is therefore on the list… I met with [PSG president] Nasser [Al-Khelaifi]. I asked him how Mbappe was going. He said to me: 'Very good'. That's where we are.
"In general, club presidents feel that the dates [of the Olympic Games] are not particularly good. It is like that."
Football at this summer’s Olympics will be held from July 23 to August 8.
It promises to be a testing summer for Mbappe if he makes the final cut for the tournament.
Mbappe will most certainly be in the France squad that will compete in the 2020 European Championships which runs from 12 June to 12 July across different cities in Europe.
The 2020/2021 French Ligue 1 season is scheduled to start on August 7, a day before the final of the Olympic games is played, making it possible for Mbappe to miss the start of the new season for PSG if France make it that far in the competition.
When France last competed at the Olympic football tournament at Atlanta 1996, Mbappe had not yet been born.
Mbappe has scored 27 goals in 31 appearances for PSG this season.
