The new centre, based near London's Silicon Roundabout technology hub, will eventually be used by hundreds of Amazon employees in the UK.
Amazon said that it will work on creating interactive digital services for TVs, games consoles, smartphones and computers, along with Amazon's Kindle devices.
"London is a hotbed of tech talent and testament to that fact is Amazon choosing the capital as the location for the new global digital media development centre," said an Amazon spokeswoman.
"Innovation is part of the Amazon DNA and we are creating a British centre of excellence to design and develop the next generation of TV and film services for a wide range of digital devices."
London Mayor Boris Johnson said that he was "thrilled to welcome Amazon's fantastic new international digital centre to London".
"For this wildly successful and dynamic company to choose our city to site such an important facility is a splendid feather in our cap," said Johnson.
"We know we have the talent, the space and infrastructure to make the most of the digital economy - this will be my prime message during Games-time, as I seek to woo even more companies for the capital, delivering jobs and growth for Londoners.
"Amazon's investment propels us well up the league table of global tech cities and we thank them for their vote of confidence."
Located in the Old Street area of London, Silicon Roundabout is the central hub of the government's Tech City project, intended as a way to attract big tech companies to the capital.
Amazon, the world's largest retailer, said that its eight-floor centre will house existing staff, but it could also recruit more workers in the future.
Teams working at Amazon-owned companies, Pushbutton and LoveFilm, will move to the new site, which will open "in the coming months".
Earlier in the year, Amazon was criticised over its tax arrangements in the UK, after it was alleged that the firm earned billions from sales but paid virtually no corporate tax.