The 14-time Olympic Gold medalist will front the 'Wash in Confidence' campaign which will be executed throughout the London 2012 Olympic Games and beyond.
Run across various marketing platforms, the 'Wash in Confidence' campaign will also be supported by several other Olympic athletes in other countries around the world.
"I'm excited to join the P&G family and work with the head&shoulders brand as I prepare for the London 2012 Olympic Games," Phelps said of his new role. "It's a hair care range that I've come to count on, with the amount of time I spend in the pool each week - chlorine and chemicals can give my hair and scalp a hard time.
"Doubts are the last thing any athlete needs when trying to focus and compete. Fortunately, with the help of head&shoulders, I have the confidence I need to be at my best for the moments that matter most - in the pool and in life."
Lisa Jennings, head&shoulders' global marketing director, added: "Michael Phelps's status as one of the world's greatest ever Olympians makes him the perfect person to front our international anti-dandruff campaign.
"We are proud to welcome Michael on board for this exciting Olympic Games initiative, aimed at encouraging individuals all over the world to take part in life. head&shoulders helps people wash in confidence to help them succeed, and simultaneously washes out doubts and distractions that may hold them back."
The London 2012 Olympic Games kick off on July 27, 2012.
> 'Michael Phelps: Push the Limit' launch trailer released - watch video
> 'Michael Phelps: Push the Limit' behind-the-scenes trailer