The court in the Mediterranean city of Valencia said it would hear in September the case brought by Javier Sanchez Santos, 41, against the 74-year-old performer.
Iglesias, Grammy award-winning singer who is one of the biggest stars of Latin music, has 20 days to respond to the court decision, the court added.
Sanchez’s mother, Portuguese ballerina Maria Edite, presented a paternity suit against Iglesias in 1992, but it was dismissed because of procedural reasons.
She says she had a brief affair in 1975 with Iglesias, who at the time was married to socialite Isabel Preysler.
Sanchez has said he has the results of DNA tests carried out on tissues and cigarette butts touched by Iglesias, which show there is a 99 percent probability that the singer is his father.
The items were collected by a private detective in Miami, where Iglesias now lives, according to Sanchez’s lawyer, Fernando Osuna, who specialises in paternity suits.
“It is good news because the court could have ruled that the case had already been settled,” Osuna said in a statement.
Sanchez told the Spanish newspaper ABC last week that once he had the results of the DNA test he got in touch with Iglesias’s lawyers to settle the issue “in private”, but they refused.
“They told us that they were not interested, that we should do what we had to do and that they would see us in court,” he said.
“I hope justice is done. In a certain way I felt a big relief because, no matter what happens, there is proof that says I am Julio Iglesias’s son,” he added.
Known for his romantic ballads and a prolific love life that has long been fodder for tabloid headlines, Iglesias has sold over 300 million albums in his decades-long career.