The retailer claims the limited-edition ladies' coat is the first on the high street to be made from old or unwanted items donated by shoppers and is part of its "shwopping" campaign launched in April.
Customers are being invited to leave an old item of clothing each time they buy something new, with the aim of collecting as many pieces as they sell.
The retailer said over one million items of unwanted and old clothes had been collected to date.
The donated clothing is given to Oxfam, with any items unsuitable for resale shipped to Italy, reduced to fibre form, cleaned and made into new fabric before being sold on to M&S suppliers.
The "Shwop Coat" is made from wool and will sell for £89 in selected stores and online from October 10.
Other companies offering similar schemes include Patagonia, a California-based outdoor clothing firm. Its Common Threads recycling programme was launched in 2005.