The 19-year-old posed for the cameras today in her new role and she was joined by the chain's chief executive, Stuart Rose, for the launch of the spring-summer 2008 collection.
Cole will be the exclusive face of the new M&S Limited Collection, which goes on sale from January.
New face: Lily Cole models the new collection
She will also feature in an advertising campaign next year alongside the other M&S leading ladies - Erin O'Connor, Twiggy, Myleene Klass, and Noemie Lenoir.
Marketing director Steve Sharp said: "We are thrilled that Lily has joined us as the face of Limited Collection. Her striking beauty goes without saying and her commitment to environmental issues makes for a great partnership with M&S."
Cole started a degree course at Cambridge University in October and is said to be scaling back her modelling work.
The teenager recently wrote the foreword for Tamsin Blanchard's book Green Is The New Black.
Teenage beauty: Lily Cole poses for the cameras
Key features of the new M&S womenswear range include Techno Craft designs, which feature deep colours and tribal prints.
Ankle-length maxi suits, fitted macs and tailored casualwear also appear in the range.
M&S is pushing into prettier styles of women's jeans. Its new collection includes silver denim, skinny jeans, wide-legged jeans and super-short shorts.
A spokeswoman for the chain said: "On the fashion front, we have always had a jean collection, but actually having more up-to-the-moment fashion, with silver denims, high waisted, and the short shorts, is quite new for us."
M&S production: Antonio Banderas stars with Christmas Belles (clockwise) Twiggy, Laura Bailey, Lizzy Jagger, Erin O'Connor and Noemie Lenoir
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