The container-sized Looop machine uses a technique that turns old garments into new ones.
The collected garments, which are initially cleaned, are shredded into fibres and spun into new yarn which is then knitted into new products.
The firm says the system uses no water and no chemicals, making the carbon footprint of the new products lower compared to a process that produces garments from scratch.
Pascal Brun, Head of Sustainability at H&M, said: “We are constantly exploring new technology and innovations to help transform the fashion industry as we are working to reduce the dependency on virgin resources. Getting customers on board is key to achieve real change and we are so excited to see what Looop will inspire.”
The fashion brand aims to have all its materials recycled or sourced in a more sustainable way by 2030.
An estimated 92 million tonnes of textile waste are created every year from the fashion industry.