The clash with Edinburgh is Townsend's last as Glasgow head coach, before he takes charge of the national team.
He will name his squad for the June fixtures against Italy, Australia and Fiji on Monday.
"This game is really important in finalising who we're going to take," Townsend told BBC Scotland.
"We thought about announcing it a couple of weeks ago, but thought that wouldn't have been fair on the players who are involved in this game.
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"It's the last game of the season, we'll know who is available in terms of injuries after this weekend, and it's an opportunity for certain players that may be close to selection to push themselves into that final squad."
Townsend's Warriors have failed to earn a Pro12 semi-final spot for the first time in five seasons, finishing in sixth place regardless of Saturday's result.
Their inter-city rivals have endured a torrid league campaign - ending a run of eight successive defeats with Friday's win over the Dragons - and can finish no higher than ninth.
The incoming Scotland boss will lead his new charges on a three-Test southern hemisphere tour, taking on Italy in Singapore, Australia in Sydney, and finally Fiji in the archipelago capital of Suva.
"The one positive from a Scotland perspective about neither Glasgow or Edinburgh making the play-offs is that we'll have more time to work with the players," Townsend added.
"We'll have a three-week build-up to our tour. It'll be really exciting, we're going to a new environment, Singapore to play Italy, then Sydney to play Australia, then on to Fiji. So six weeks working with that group of players is invaluable for us as new coaches."
The former Scotland international, who won 82 caps, will have a near-full-strength compliment of players at his disposal, with Warriors duo Stuart Hogg and Tommy Seymour the only Scots to win selection for the British and Irish Lions tour of New Zealand.
"We'll be looking to take our strongest squad," Townsend said. "So after this weekend the players that are available, players that are on form, players who've played well for Scotland, have got the best chance of going on that tour."
Townsend will also have former Scotland captain Mike Blair at his flank, with the retired scrum-half joining the national coaching set-up for the trio of Tests.
Blair took up the role of skills coach with Glasgow after retiring from playing last April, and will remain with the Warriors staff outside of international windows.
"Mike's a new coach, he's only been coaching for this season, but he's shown a really good commitment to the role," Townsend said.
"He works very hard, he's been a big help to me in terms of the attack, he's been a big help to the players too with the skill work he does and the close work he does with the scrum-halves.
"So to have him when we're on tour and when we're in Test windows will be great, but also for him to continue [at Glasgow] working with the group will be excellent for the Glasgow players."
Gregor Townsend says Saturday's 1872 Cup derby provides one last chance for players to force their way into his first Scotland squad.