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In a new-look half-back partnership Lee Dickson makes his first international start, replacing Ben Youngs, while Ben Morgan comes in for Phil Dowson at No.8.
In the second row Leicester’s Geoff Parling is selected ahead of Tom Palmer, who drops out of the 22, meaning that England’s starting XV contains seven players who will be making their first appearances in a full international at Twickenham.
And the stakes could not be higher against a Wales team who, like England, have won both their opening matches.
There are more familiar faces on the bench with fly-half Toby Flood and second-row Courtney Lawes fit enough to be named in the replacements by Lancaster alongside Youngs and Dowson.
Farrell, 20, has earned praise from all corners for his composed displays at inside centre but will make his first senior international appearance at stand-off with Lancaster, who revealed Hodgson has injured his finger, backing the youngster to seamlessly adapt.
"Charlie cut his finger in training earlier in the week and needed stitches but it swelled up and there is a sprain there,” said Lancaster.
“We assessed him this morning and he cannot grip fully. Owen has trained throughout and knows our patterns and plays so we are fully confident in his ability to run the game from 10 and we are looking forward to seeing how Brad and Manu gel together in the centre.
“It's been a good start with two wins but we've got real competition for places and Lee, Ben and Geoff deserve an opportunity to start this game.
“It means that Phil (Dowson) and Ben (Youngs) will provide a different role from the bench and it's great to have Courtney and Toby, who can also give us options in what I am sure will be a full-on encounter.”
Lancaster is also relishing leading England out at Twickenham for the first time, having taken charge of both of his matches on foreign soil in Scotland and Italy respectively.
He added: "It's our first home game of the RBS 6 Nations which we are really excited about and we are sure the crowd will get behind us just as the travelling supporters have done in Scotland and Italy. “Playing at Twickenham makes it extra special for us and I know we will get all the encouragement we need."
15. Ben Foden (Northampton Saints)
14. Chris Ashton (Northampton Saints)
13. Manu Tuilagi (Leicester Tigers)
12. Brad Barritt (Saracens)
11. David Strettle (Saracens)
10. Owen Farrell (Saracens)
9. Lee Dickson (Northampton Saints)
1. Alex Corbisiero (London Irish)
2. Dylan Hartley (Northampton Saints)
3. Dan Cole (Leicester Tigers)
4. Mouritz Botha (Saracens)
5. Geoff Parling (Leicester Tigers)
6. Tom Croft (Leicester Tigers)
7. Chris Robshaw (Harlequins)
8. Ben Morgan (Scarlets)
16. Rob Webber (London Wasps)
17. Matt Stevens (Saracens)
18. Courtney Lawes (Northampton Saints)
19. Phil Dowson (Northampton Saints)
20. Ben Youngs (Leicester Tigers)
21. Toby Flood (Leicester Tigers)
22. Mike Brown (Harlequins)