As Hermione Granger in the Harry Potter films, she is used to dealing with all sorts of revolting potions. But now Emma Watson is to be associated with a far more enchanting concoction - as the new face of the Chanel fragrance Coco Mademoiselle. The 18-year-old actress has signed a two-year contract worth £3million with the French fashion house to promote the brand.

Miss Watson, who became a household name in the films based on JK Rowling's books, has signed up with leading model agency Storm, which is thought to have secured her first major campaign.

It is understood that she will replace Keira Knightley, 23, whose contract with Coco Mademoiselle ends this summer. Sources said Chanel is creating a new role for Miss Knightley who, in her latest advert, poses provocatively with just a bowler hat covering her modesty.

A source said Miss Watson's appointment will be announced next month. 'Emma has been excitedly telling friends that she is going to be taking over from Keira. Emma has been slowly integrated into the Chanel brand. They have been dressing her for film premieres and parties over recent months to see if she is the right fit. 'Once it became clear she is growing into a beautiful young woman and wears the Chanel brand so elegantly, they had to sign her up. Chanel realises it is important to target a young audience.'

It is understood that Miss Watson's bosses at Warner Bros, which makes the Harry Potter films, have given their full backing to the deal. As the face of Coco Mademoiselle, Miss Watson, who earns £2million a movie, follows in the footsteps of Kate Moss, who was signed up in 2003 but dropped the following year in favour of Miss Knightley. A spokesman for Miss Watson last night declined to comment.