Osbourne became the face of Madonna and daughter Lourdes's 'Material Girl' fashion line earlier this year.
Osbourne told Jay Leno on The Tonight Show: "I met Lourdes about two years ago and when they were asking for a new Material Girl they asked if I'd be interested. Before they even finished the sentence I said, 'Yes! That's the coolest thing ever!'
"But it's also very intimidating to work with somebody who is, in my eyes, the best of the best. To walk in the room and not be a complete nerd and fanning out. I sit there with a sweaty top lip having a panic attack the whole time like, 'Oh my God, when will this be over?!' Dabbing my lip because I'm so nervous!"
The 26-year-old previously showed her admiration for Madonna by covering the star's 'Papa Don't Preach' track on her debut album Shut Up.
Osbourne, who also appears on Fashion Police, added to Leno that she has become great friends with Lourdes through their work together, describing the teenager as "unbelievably intelligent and smart".
Leno ended the interview by thanking Osbourne for appearing in light of the death of her close friend Amy Winehouse on July 23. Osbourne said that she didn't want to discuss the singer because she would end up in tears.
> Amy Winehouse death "shocked" Kelly Osbourne
Watch more of Kelly Osbourne on The Tonight Show below: