Toseland, 32, is set to make the record attempt in September 2014 at the Bonneville Salt Flats in the USA.
The current record stands at 376.363mph, set by American Rocky Robinson and ratified by the Federation International de Motocyclisme.
The project is being led by Alex Macfadzean, a former GP and TT sidecar competitor and the current British motorcycle land speed record holder, with support from staff and students at Derby University.
Toseland said he was fully aware of the magnitude of what he was attempting.
"I am hugely excited about this record attempt but I'm under no illusions as to how difficult it will be," he said.
"I've been racing motorcycles for most of my life but this means learning a completely new technique in order to pilot the motorcycle streamliner.
"The team involved with the project are amazing and really know their stuff, so I know I'm in safe hands in terms of the development.
"We've been in discussions about this for several months, but today at the University of Derby's workshops I sat in the cockpit of the machine for the first time, so it now all seems very real.
"If successful, this will be a fantastic personal achievement but also a great accolade to bring back to the UK."
Toseland won his first WSBK crown for Ducati in 2004, aged just 23. In 2007 he added a second title with the Ten Kate Honda, joining Troy Corser as the only men to win the WSBK championship with different manufacturers.
He stepped up to MotoGP with the factory-supported Tech 3 Yamaha squad in 2008, qualifying second and finishing sixth on his debut in Qatar.
He stayed with the team for 2009 but struggled with form and injuries and was replaced at the end of the year by Ben Spies. He returned to the WSBK fold, but retired from professional motorsport due to a wrist injury suffered in March 2011 during official testing.