Rees becomes the 128th player to skipper Wales after Jones was ruled out of the clash with Australia due to a damaged calf.
Jones sustained a grade-two tear during the Ospreys' defeat to Glasgow on Sunday.
He will be re-assessed after the Australia match to determine if he will be able to face South Africa at the Millennium Stadium on November 13, Fiji on November 19 and New Zealand on November 27.
"It's obviously a huge honour to captain your country and it's something that probably won't really sink in until we get to match-day," said Rees, who took over from Lee Mears as the Lions' starting hooker for the second and first Tests against the Springboks.
"To lead the side out at the Millennium Stadium against a side of the strength and stature of Australia is just an amazing thought.
"I hope to be able to take it all in my stride and as a squad we are certainly looking to perform against the Wallabies and come away with the right result to kick-off our autumn campaign, and this Rugby World Cup season, in the right way."
While one Lion was left celebrating this afternoon, another had far less to cheer about after being released from the Wales squad due to injury.
Leigh Halfpenny, the youngest Lion on the last tour, has been ruled out for between three and four weeks with damaged ankle ligaments.
The 21-year-old follows fellow Lion Lee Byrne in returning home from the Wales camp after the Ospreys full back fractured a bone in his right hand at the weekend.
Halfpenny has been replaced by Aled Brew of the Dragons who had already been training with the squad as cover for young Scarlets wing George North.