My original plans have changed and I now am stuck with having direct burial cable 4/0-4/0-2/0-with 1/0 ground. My new plan is now to run sub panel from my home 200 amp main breaker panel to the shop. My problem is I am using a 100 amp breaker and the larger cable wires will not fit into the 100 amp breaker. Can I use the larger cable for burial and use connectors inside a junction box to splice in the last few feet of wire to fit the breaker ?
Make the splice in the panelboard itself
I'd use a two-pole aluminum rated power distribution block of suitable size listed to UL 1953 and rated to IP20 (such as a pair of Eaton/Cooper PDBFS303s, dovetailed together) to make the splice inside the panelboard cabinet instead of in a separate junction box. Then you can run a pair of 2/0 jumpers from the distribution blocks to the panelboard terminals.
This takes up a bit more panelboard cabinet space, but is neater and cleaner than having splice lugs hanging loose in the panelboard or having a separate box just to splice wires. Check with your AHJ first though, as there is the off chance that they're not OK with mounting things to a panelboard cabinet that the manufacturer did not originally intend to go there.
(Making the splice in a separate box is also possible, just slightly silly as you'd need more wire and parts to do that vs. doing the splicing in the panelboard cabinet.)