The ad, called The Boy and the Piano, opens with a dressing-gown clad Sir Elton gently tapping out the opening notes to Your Song - his first major hit - before viewers are taken back through key moments in his life with scenes of him on stadium tours, travelling on a private jet, recording Your Song, playing the piano in a local pub and performing in a school recital.
It ends with a four-year-old Elton running down the stairs on Christmas morning and unwrapping his grandmother's gift of her piano - a scene "inspired by real events" but involving "some creativity", the department store said.
With the exception of the present-day opening scene featuring Sir Elton himself, actors take on the role of him at various stages of his life, while the images of the stadium based on a concert in Portland in the US were entirely recreated with computer-generated imagery.
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It is the second of the retailer's Christmas ads to feature Your Song after singer Ellie Goulding recorded a cover for the 2010 campaign.
Sir Elton said: "The John Lewis Christmas campaign has so many warm memories for me and my family.
"It's been a lovely opportunity for me to reflect on my life in music and the incredible journey I have been on, and how first playing my grandmother's piano marks the moment when music came into my life.
"The ad is absolutely fantastic and I've truly loved every minute of being a part of it."
John Lewis customer director Craig Inglis said: "The ad tells the story of why Elton's piano was more than just a gift and we hope to remind customers of that special moment when they've given a gift at Christmas time that they know will be treasured forever."
John Lewis addressed speculation about the cost of this year's ad, describing reports that it had paid Sir Elton Â£5 million as "wildly inaccurate".
It added that Sir Elton had requested that a portion of his fee be donated to the Elton John Charitable Trust when he was first approached to be involved.
The retailer, which reported a 98.8% profits crash for the first half of the year in September, said the ad was a "crucial part" of its overall marketing campaign and "one of the most effective marketing campaigns in the industry, delivering an excellent return on investment".
John Lewis and Waitrose employees were given the first opportunity to share the two minute and 20 second ad at 6am on Thursday before its launch on the store's social media channels, its website and in shops at 8am.
The ad first airs on television on Thursday at 9.15pm during ITV's Dark Heart, although ITV viewers may have noticed that the theme tunes to some of the channel's shows including Coronation Street and This Morning were played solely in piano notes on Wednesday to tease the advert's premiere.
Customers at the retailer's flagship Oxford Street branch can also step into a 2,000 square foot recreation of the ad production set to try on some of the costumes, listen to recordings from Elton John's 17-11-70 album and have photos taken at the piano.
But shoppers might be disappointed to learn that there will be no plush toys available in Sir Elton's likeness this year, with the retailer instead selling four pianos - two uprights for around Â£800 and two keyboards starting at Â£150 - and a range of vintage tour t-shirts.