From Asuncion the gruelling 9,000 km race will cross into Argentina, negotiate the Andes in Bolivia before returning to Argentina and a grandstand finish at Buenos Aires on January 14.
Competitors will have to deal with six days at 3,000 metres or more above sea level.
The only scheduled rest day, January 8, will be spent in the Bolivian capital of La Paz at a lung-busting 3,500m above sea level.
While on the Bolivian Altiplano, five stages will be raced with a maximum altitude of 4,500m reached.
Stephane Peterhansel, who is chasing a 13th Dakar title, is among those fearing the physical effects of racing at South America's punishing high altitudes.
Peterhansel's Peugeot team is completed by two-time world rally champion Carlos Sainz, a Dakar winner in 2010, but who has failed to finish in the last two years -- underlining what a feat just completing the race can be.
Nine-time world rally champion Sebastien Loeb returns for a second year with the French manufacturer after marking his debut with a ninth-place finish in 2016.
More than 90 car teams will take part with Toyota and Mini likely to be Peugeot's main challengers.
Mini, the 2012-2015 champions, pin their hopes on Finland's Mikko Hirvonen, who marked his Dakar debut in 2016 with an impressive fourth-place spot.
In the motorcycle championship, Australia's Toby Price will be defending his title with KTM.
The 2017 race will be the ninth time the Dakar has been held in South America.
The race was cancelled in 2008 over security threats in Mauritania, organisers taking the decision to move the rally to another continent in 2009.