Sancho, 18, has assisted in five league goals for Dortmund this season as he has helped them top the Bundesliga after six games.
Football Association chief executive Martin Glenn stated that England will eventually win the World Cup and European Championships when announcing Southgate's new deal - striking comments, albeit less forceful than former chairman Greg Dyke pinpointing silverware in Qatar.
Dele Alli, Fabian Delph, Jesse Lingard and Adam Lallana all miss the two Nations League fixtures through injury.
"We think there are some exciting young players we have been tracking, and it's a great opportunity for us to look at them".
"He's a player that we know has good technical quality, is grasping the tactical side of the game - I was interested to read his interviews this morning on that - so it's a good opportunity for him to come in".
Sancho is the first player born this century to be called up by England.
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"It aligns with what we have done in the last 18 months", said Southgate. He's had two starts in the Champions League this year, he's a player that is explosive, is really creative in the final third, has had a big impact in terms of assists in the matches that he's played, can score goals. We're always conscious of the balance in bringing young players in but we think they are performing well with their clubs and they are confident players. He was voted the player of the tournament at the European Under-17 Championship previous year and also helped England win the Under-17 FIFA World Cup in India. He recently signed a new contract with the German club. "He's been courageous enough to go overseas and play", added Southgate.
One of England's weak points in recent years, including at the World Cup, was a lack of creativity and vision in midfield.
Watford midfielder Nathaniel Chalobah and goalkeepers Alex McCarthy and Marcus Bettinelli are the other uncapped players included, while Ross Barkley has been recalled at the expense of Chelsea team-mate Ruben Loftus-Cheek.
Borussia Dortmund's Sancho has risen from the under-19s - Southgate, however, said he would have been selected regardless of injuries - while Mount and Maddison had been part of Boothroyd's under-21 squad.
Tottenham midfielder Harry Winks, whose only cap came against Lithuania in October 2017, returns to the squad. If he sees out his deal, he will be longest-serving England coach since Bobby Robson (1982-90).