The 17-year-old singer, who finished third behind Little Mix and Marcus Collins in last year's series, has been offered a three-album contract with Sony subsidiary Xenomania.
Lily is the first artist to be signed to the new label, which also works with Girls Aloud and The Gossip.
She was originally eliminated from the competition during the first live show by judge Kelly Rowland, but was brought back by public vote following the departure of Frankie Cocozza for breaking one of the show's 'golden rules'.
"Amelia will be the perfect popstar and has fantastic hit-makers who were behind some of The Saturdays' and Girls Aloud's best songs," an insider told The Mirror. "It'll be a great combination."
Lily is known to be currently recording material for her debut album.
Collins will be the first of this year's X Factor finalists to release an LP.
His self-titled opus is scheduled to become available on March 12.