ITV News Sports Editor Steve Scott reports from Tokyo on Team GB's flag bearers at the Olympics
Mills, 33, won sailing gold in 2016 in the women’s 470 class alongside Saskia Clark, and will defend the title in Tokyo with a new team-mate, Eilidh McIntyre.
She said being nominated to lead the UK team out on Friday alongside Sbihi was "very emotional".
Sbihi, who is the fourth rower to be afforded the privilege, won gold in the men’s coxless fours in Rio and will compete in the men’s eight in Tokyo.
He is the first person of Muslim faith to be chosen for the honour and told ITV News he hoped he would help inspire the next generation.
"I needed to do a sport where you get to sit down and go backwards to show I was good at something" - Olympic gold medalist Mohamed Sbihi on his journey from being a 'normal kid' to Team GB joint flag bear
"I feel like anyone can do it if I can do it," he said.
"There's been a lot of hard work and dedication put in, but all it showed that someone needed to put a little bit of faith in me and find me the right sport.
"I was hopeless at playing all the other sports, so I just needed to do a sport where you get to sit down and go backwards to show how good I was at something.
"I think it's very important to be able to inspire the next generation whether that be the next generation of inner city kids or kids not from a social-economic background that is maybe always assigned to rowing.
"And, of course, incredibly important with the faith that I have."
In a break from tradition, the International Olympic Committee (IOC) confirmed in March that one female and one male athlete can be flagbearers for their respective country.
Mills told ITV News being asked to be a flagbearer for Team GB was "absolutely mad".
She said she felt "very emotional just thinking about who's gone for before me and done this and what it means to me and everyone who knows me and everyone back in the UK."
"It was mad, absolutely mad" - Sailor Hannah Mills on the moment she was asked to be one of the flagbearers at the opening ceremony of Tokyo 2020 Olympic Games alongside Mohamed Sbihi
Asked whether it would be strange walking out into an empty stadium, Mills said she would be "absorbed in the moment"
"I was there for the London Opening Ceremony and obviously that was just incredible to be a part of a as an athlete at a home games but i think ultimately this Games is going to be unique.
"There are many strange things about it that are different from before but I'm carrying the flag for everyone back at home and everyone here and all the athletes, 30 or so in the delegation are representing everyone so i think that in itself is very, very special. "And I don't think we'll notice that much, I think we'll be absorbed in the moment."
Mills and Sbihi follow in the footsteps of Sir Andy Murray, who carried the flag at the opening ceremony of the Rio Olympics in 2016.
Cyclist Chris Hoy lead Team GB out in front of a home crowd in London 2012 accompanied by David Bowie's 'Heroes'.
Rowing gold-medallist Steve Redgrave is the only athlete to have been chosen for the honour in two consecutive Summer Olympic Games (1992 and 1996).
Sbihi, who is competing in his third Games, said: “It is such an honour to be invited to be the flagbearer for Team GB.
“It is an iconic moment within the Olympic Movement – people remember those images. I certainly remember the images of Andy from Rio and even before I was a rower I remember seeing Sir Matt and Sir Steve, so it is something I am incredibly proud of.”