Yarde has replaced David Strettle on the left wing and he will be joined in England's "X-factor" three-quarter line by Bath centre Kyle Eastmond. The rugby league convert will step up from the bench to make his first England start after Billy Twelvetrees was called up by the British and Irish Lions.
England won the first Test 32-3 and head into Saturday's showdown in Buenos Aires aiming to complete their first ever series clean sweep of the Pumas in Argentina. The last time England fielded a younger back division was in the defeat to Wales at Wembley in 1999. Lancaster's exciting selection on Saturday boasts just 34 caps between them.
"It has definitely got an X-factor to it, the backline," Lancaster said. "Marland has shown in training and in the games that he is ready for this chance. If you look at the stats at the end of the season and compared all the wingers and back three players, he is right up there in terms of defenders beaten, metres made and line breaks.
"(Eastmond replacing Twelvetrees) is as close to a straight swap as there can be. They are different physically but Kyle can definitely carry and he can distribute and pass pretty much like Billy can.
"The timing of his passing, the range of passing he has got is exceptional and the challenge is to translate that into a game. The way we want to play should allow him to express himself and show those talents in the game and it is the next step for him to prove he can do it."
Yarde will become the 24th new player capped by Lancaster in 19 Tests and Stephen Myler could be the 25th if he comes off the bench at the Velez Sarsfield stadium. London Irish director of rugby Brian Smith rates Yarde as a better player than Chris Ashton, who has been rested from this tour, and he believes Yarde will go on to win 50 caps for England.
Prop David Wilson and lock Joe Launchbury have not trained fully this week but neither are thought to be doubts for the final game of the season.
England team to play Argentina in the second Test in Buenos Aires on Saturday, June 15 is: M Brown (Harlequins); C Wade (Wasps), J Joseph (London Irish), K Eastmond (Bath), M Yarde (London Irish); F Burns (Gloucester), L Dickson (Northampton); J Marler (Harlequins), R Webber (Bath), D Wilson (Bath), J Launchbury (Wasps), D Attwood (Bath), T Wood (Northampton, capt), M Kvesic (Worcester), B Morgan (Gloucester).
Replacements: D Paice (London Irish), H Thomas (Sale Sharks), P Doran-Jones (Northampton), C Lawes (Northampton), B Vunipola (Wasps), R Wigglesworth (Saracens), S Myler (Northampton), B Foden (Northampton).
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