National Lottery bosses see Connolly as a way of striking a new chord with a younger audience.
The Scottish funny man will star in a major advertising campaign for the Lottery, which is launching next month.
He will also feature on point-of-sale and direct marketing materials.
Connolly, who has previously fronted advertising campaigns for Goldfish credit cards and Guinness' Kaliber lager, has been chosen for his down-to-earth appeal and familiar voice.
It is understood that he will narrate the new ads, created by WCRS, and that the campaign will focus on the impact that winning the Lottery has had on players' lives.
This heralds a significant switch in strategy for Camelot, which has hitherto concentrated on players' hopes of winning or on contributions to good causes.
Chief executive Dianne Thompson believes many adults now consider the chance of winning big money so slim that they have stopped playing.
"We can confirm that we have entered into an agreement with Billy Connolly, who will be undertaking a range of activities to support and promote the National Lottery," said a Camelot spokeswoman.
Sales of Lottery tickets peaked in 1997-98 at £5.51bn, falling to £4.98bn in 2000-01. Thompson is expected to reveal a further fall in sales for the past year at the end of next month.
It is also understood that commercial director Phil Smith is planning a major restructuring of Camelot's marketing department and intends to introduce a wave of new talent to the division. However, Camelot dismissed this as speculation.
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