Shonibare's final work will be a 1:29 scale replica of the original HMS Victory
The latest art to be shown on Trafalgar Square's Fourth Plinth will be unveiled in May, it has been announced.
The "compelling" work, by artist Yinka Shonibare, is a scale replica of HMS Victory in a giant bottle.
The artist said he hoped it would help people reflect on British history and modern multiculturalism.
His plinth commission follows on from Antony Gormley's One and Other, which saw 2,400 members of the public each spend an hour on the plinth.
More recently, a statue of Air Chief Marshal Sir Keith Park has stood on the site, which has been used a showcase for contemporary art since 2005.
Shonibare's work, entitled Nelson's Ship in a Bottle, will be the first Plinth commission to reflect specifically on the historical symbolism of Trafalgar Square, which commemorates the Battle of Trafalgar, when Nelson all but destroyed the combined Spanish and French fleets.
The ship's 37 sails will be made of patterned textiles commonly associated with African dress. The history of the fabric reveals they were inspired by Indonesian batik design, mass produced by the Dutch and sold to the colonies in West Africa.
The work weaves together historical and global threads of British colonialism, and its expansion in trade made possible through the freedom of the sea trade routes that Nelson's victory provided.
It will be unveiled on 24 May and stay in place for 18 months.
PREVIOUS PLINTH ARTISTS
Alison Lapper Pregnant - Mark Quinn (Sept 2005 - Oct 2007)
Model for a Hotel - Thomas Schutte (Nov 2007 - May 2009)
One and Other - Antony Gormley (July - Oct 2009)
"I wouldn't put my work into such a significant public square then not acknowledge they history of that square," Shonibare told the BBC News website.
"I was thinking about the significance of Trafalgar Square and Nelson's Column, so the piece I came up with is very much about the context.
"Nelson won the Battle of Trafalgar in 1805, that led to the freedom of the seas, the British were able to expand the Empire as a result, and that lead to the current multicultural London that we have now.
"The piece is a tribute and a celebration of the city we have today."
The ship is a 1:29 scale replica of the original HMS Victory moored at Portsmouth. The 2.35m high ship is inside the specially-made glass bottle.
Shonibare added: "The ship in a bottle is itself a magical thing, and as a child I was mesmerised by the idea, and I always wondered how it got in there.
"I won't reveal how I did it. I don't want to spoil magic. People should just enjoy it."
Boris Johnson, the Mayor of London, said: "Set against the backdrop of one of the most iconic symbols of Britain's seafaring heritage, Yinka Shonibare's ship, with its riot of colour, makes a powerful statement that will intrigue and inspire in equal measure.
"It is a stunning work, with history and culture from West Africa to East Asia, woven in its sails, much as the threads of those places and their people are woven in the fabric of the capital."