Shonibare's work will "reflect multicultural Britain"
A colourful replica of Nelson's ship HMS Victory in a bottle will take its place on the Fourth Plinth in Trafalgar Square next year.
Yinka Shonibare's model of the ship on which Nelson died will be placed in a 5m (16ft) by 2.5m (8.2ft) acrylic bottle on the plinth.
The ship will follow Antony Gormley's project and a statue of the Battle of Britain hero Sir Keith Park.
Westminster Council has permitted the ship to occupy the plinth until 2012.
Antony Gormley's project, which involves members of the public occupying the plinth 24-hours a day for 100 days, will finish in October. It will be followed by Sir Keith's statue for six months.
Shonibare's ship will reflect a multicultural Britain with its patterned sails inspired by African prints.
Robert Davis, the council's deputy leader and chairman of the planning applications sub committee, said: "This artwork is particularly appropriate for Trafalgar Square and it is fitting that a replica of Nelson's ship, on which he was fatally wounded, should sit so close to the world famous monument of the admiral."