The fly-half superstar, poised for his first major Test match since the 2003 World Cup final, will partner skipper Brian O'Driscoll in midfield.
Wilkinson comes at the expense of in-form Welsh Grand Slam star Gavin Henson, who misses out completely.
Wilkinson has previously worn the number 12 shirt for England, but it is as a fly-half that he made his name during a 52-cap international career.
With Wilkinson moved, Stephen Jones will forge an all-Welsh half-back combination alongside Dwayne Peel, and their fellow Six Nations winners - winger Gareth Thomas and prop Gethin Jenkins - are also selected.
In another surprise move, full-back Josh Lewsey lines up on the right wing, and his England colleague Jason Robinson starts in the number 15 jersey.
Lewsey has produced some imperious performances on tour as a potent strike-runner, but despite Robinson only starting one game after arriving late in New Zealand for personal reasons, he is preferred.
Lewsey, Robinson and Wilkinson will be joined in the starting XV by fellow World Cup winners Julian White, Ben Kay, Richard Hill, Neil Back and Martin Corry, while there are four more on the bench - Steve Thompson, Danny Grewcock, Matt Dawson and Will Greenwood.
At 36, Leicester flanker Back is the oldest player ever selected in an original Lions squad, and his selection comes more than a year after he retired from England duties.
But he is now poised to become a Test Lion on three successive tours, after starting against South Africa in 1997 and Australia four years ago.
Greenwood, meanwhile, will make a Lions Test debut if he appears as a replacement, compensating for the last two tours when his hopes were destroyed by injuries.
Up front, Ireland's Shane Byrne has won the vote as hooker over Thompson, with Ben Kay and Paul O'Connell paired together at lock, and Woodward has chosen an all-English back-row of Hill, Back and Corry.
Ryan Jones, who only joined the Lions squad just under a fortnight ago as replacement for an injured Simon Taylor, is rewarded after his barnstorming display against Otago with a bench spot.
The starting line-up consists of eight Englishmen, four Welsh and three Irish.
The youngest player on duty is 23-year-old Peel, 13 years Back's junior, while five of the pack are aged 31 or over.
Woodward has banked on experience, fielding a team with a combined international cap total of 696.
And with wet weather forecast for Christchurch this weekend, a strong kicking game and powerful scrummaging will inevitably top the Lions' agenda.
British & Irish Lions team to face New Zealand in the first Test at Jade Stadium, Christchurch, on Saturday.
Jason Robinson (Sale Sharks, England); Josh Lewsey (London Wasps, England), Brian O'Driscoll (capt, Leinster, Ireland), Jonny Wilkinson (Newcastle Falcons, England), Gareth Thomas (Toulouse, Wales); Dwayne Peel (Llanelli, Wales), Stephen Jones (Clermont Auvergne, Wales); Gethin Jenkins (Cardiff, Wales), Shane Byrne (Leinster, Ireland), Julian White (Leicester Tigers, England), Paul O'Connell (Munster, Ireland), Ben Kay (Leicester Tigers, England), Richard Hill (Saracens, England), Neil Back (Leicester Tigers, England), Martin Corry (Leicester Tigers, England).
Replacements: Steve Thompson (Northampton Saints, England), Graham Rowntree (Leicester Tigers, England), Danny Grewcock (Bath, England), Ryan Jones (Ospreys, Wales), Matt Dawson (London Wasps, England), Will Greenwood (Harlequins, England), Shane Horgan (Leinster, Ireland).