The Mexican artist’s sculpture, 850 Improntas, was chosen alongside a work by Samson Kambalu to join the rolling display of public art in central London.
Margolles’s work features casts of the faces of 850 transgender people from London and around the world.
The “life masks” will be arranged around the plinth in the form of Tzompantli, a skull rack from Mesoamerican civilisations that covered central Mexico to northern Costa Rica. The racks were often used to display the remains of sacrifice victims or prisoners of war.
A statement from City Hall said she “works closely with this marginalised community that sometimes is unable to access social care”.
Margolles said her expectation was that the British weather would turn the work into a kind of “anti-monument” by deterioration. She is known for art that explores social causes and confronts “the taboo of death”.
Kambalu’s work, Antelope, depicts a 1914 photograph of the Baptist preacher John Chilembwe and European missionary John Chorley.
“On the plinth, Chilembwe is larger than life while Chorley is lifesize; by increasing his scale, the artist elevates Chilembwe and his story, revealing the hidden narratives of under-represented peoples in the history of the British Empire in Africa and beyond,” City Hall said.
Margolles’s sculpture will go on display at the Fourth Plinth in 2022, while Kambalu’s will be exhibited in 2024.
The artworks were selected by the Fourth Plinth Commissioning Group after nearly 17,500 members of the public voted for their favourite designs.
Ekow Eshun, chairman of the Fourth Plinth Commissioning Group, said: “This year was an incredibly strong shortlist from six incredibly exciting contemporary artists.
“I would like to congratulate Samson Kambalu and Teresa Margolles on winning the commissions, and to thank the public for all of their comments; we received more votes than ever before.
“I am thrilled at the outcome and very much looking forward to seeing the new works on the plinth.”
The Fourth Plinth is currently home to a giant sculpture of a dollop of whipped cream with a fly and cherry on top, by artist Heather Phillipson.
Additional reporting by Press Association