Based in the company's new Brick Lane headquarters, LBi Digital PR will work across all online media outlets, devising stand-alone campaigns and working to complement digital marketing activity run by LBi.
Jill Lloyd, former UK PR manager for , has been appointed to head the new division, which sits within the existing LBi media team directed by LBi's global media director, Caroline McGuckian.
Initial clients include the Starwood Hotel Group, the British Red Cross, and Volkswagen.
The service also integrates the Search PR offering currently provided by SEO specialist LBi Netrank. LBi acquired Exeter-based Netrank in January 2008.
Lloyd said: "LBi has a vast pool of resources to draw on, from analytics to SEO to media planning, all of which will be integrated with PR to significantly increase our clients' online visibility.
"It is our belief that a creative yet results-oriented strategy will deliver PR that is more targeted and measurable, as well as having long-term, enduring value."
The in-house department is the final step in LBi's move towards the delivery of a full-service digital media offering.