Fallon was awarded the account without a pitch. The work was previously handled by AIS London.
The Publicis Groupe agency has worked with Skoda since 1998 and picked up its European ad business in 2014, having already held the UK account.
MediaCom handles the media planning and buying for the VW-owned car brand.
Fallon will now handle the digital communications across display and online content for Skoda in the UK.
Gareth Collins, the chief executive of Fallon London, said: "We’re delighted that Skoda has chosen us to lead the charge in developing digital and content work for the brand going forwards.
"It is a decision that we feel reflects the broadening skill set that Fallon London has to offer in the digital and content space".