The banner, which will be installed at Westfield Stratford later this month, carries a sports theme and is being printed on the company's 5m-wide HP Revolution press onto mesh fabric.
Part of the company's ongoing contract with the £1.45bn Stratford shopping centre, the piece will replace a banner of equal size, produced by the firm last September, which is believed to be the UK's largest.
Hollywood Monster's creative team has been working on the new banner for more than four weeks to date with installation planned at Westfield between June 28-30.
Skelton, the 24-year-old swimmer from Reading, was invited to start the production process ahead of the games, which begin next month.
Hollywood Monster director Simon McKenzie said it had been a huge coup for the company to be working on a "prestigious project" with Westfield Stratford.
He added: "It’s part of the UK’s most ambitious regeneration project and of course it’s one that we’re really excited to be involved in. In addition to the record-breaking banner, we’re also producing vinyl glass wraps and fabric hoardings.
"We can’t wait to see the full effect of the Stratford banner – it’s going to have a massive impact throughout the world’s greatest sporting event."
Last month, the Birmingham-based signs and graphics specialist took on eight new recruits in response to a predicted £1m increase in turnover this year.
The new staff included sales manager Dan Whitford, sales executive Chris Kelly, project manager Mike Clarke, quality manager Richard Green, business development manager Richard Hinckley, installation manager Steve Allen, project manager Paul Marsh and senior creative designer Brad Davies.
Hollywood Monster enlists Olympic swimmer for latest banner project
Hollywood Monster has enlisted Team GB synchronised swimmer Katie Skelton to kick off production on a 350x14m banner.