The account was previously held on a project basis by Saatchi & Saatchi London, which had the £4 million UK business, and the Dentsu-owned BLD.
Over the past two years, Saatchis won the creative briefs for Lexus' three pan-European new- model launches.
Lexus called a pan-European pitch in December in a bid to consolidate its business.
Saatchis established a lead team in Brussels, named Team One Europe, to handle the pitch and the business. The network already operates Team One in Los Angeles, which handles all of Lexus' US marketing communications.
Richard Nunn, the former regional client services director at FCB Asia-Pacific, will head the new subsidiary.
Nunn said: "This is really great news for us. Lexus is one of the very best car companies in the world with leading new technology and great designs. Lexus is poised to change the way consumers think about the luxury automotive category, so we're very excited to be able to partner Lexus Europe on its journey of brand transformation."
Tony Granger, the executive creative director of Saatchis, said: "This is really exciting as it solidifies the relationship between us and Lexus. It gives us the business across Europe as well as in the UK."
The initial assignment includes a new pan-European brand campaign and the pan-European launch of the new RX400h, Lexus' first luxury hybrid vehicle. The RX400h will arrive in European showrooms in January 2005.