Danny, who plays Keanu Taylor in BBC soap EastEnders, will play the Beast in Beauty And The Beast at the theatre, with local lass Hayley Kay announced to play the magical Fairy in this new staging of the story from UK Productions.
Earlier this year, Danny was named best newcomer at the National Television Awards.
He said: "I am delighted and excited to be performing at this iconic theatre over the festive season.
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"The Grand Theatre has a reputation for excellence and I feel privileged to be part of Beauty and the Beast."
Alongside Danny and Hayley, Nick Wilton will be back as the dame, and BBC Radio Lancashire favourite Steve Royle will mark his 16th year in the Grand's panto as Louis La Plonk.
Beauty And The Beast runs at the Grand from December 7 to January 6.
The show will be the 23rd panto at the Grand in conjunction with UK Productions.
Producer Martin Dodd said: "For our 23rd pantomime at the Grand Theatre we are delighted to be launching our new title Beauty and the Beast.
"Containing all the elements that we know Blackpool audiences will love, including lots of comedy, spectacle and music, and of course the hilarious Steve Royle, EastEnders and Benidorm star Danny Walters and the welcome return of Radio Wave's very own Hayley Kay as our magical Fairy we are confident that it will be a hot ticket this Christmas."
Grand marketing manager Andrew Howard said: "We're so lucky working with such an incredible producer, Martin Dodd is like one of the family.
"Casting has been incredibly exciting, and it's been hard keeping the news of Danny quiet.
"With Danny already winning the NTA for Best Newcomer we know he's going to be a huge hit with our audiences!
"Sales of tickets are already way ahead of last year so we're encouraging people to book earlier than normal if they can for the very best seats.
"Blackpool audiences are guaranteed another year of spectacular sets, dazzling costumes and side-splitting comedy being an all-new production."
The show ll be directed by Damian Sandys, who was nominated for best director in the 2017/18 Great British Pantomime Awards.
The classic children's favourite will follow heroine Belle as she dreams of a happier life, but is instead transported to a cursed castle - where she's held captive by a hideous beast, placed under a spell by an evil enchantress.
Can Belle see beyond the beast and fall in love with her captor?
Will the Beast’s selfishness cost him the world he once knew and the hand of the girl who has melted his heart?