Smith and Farrell had started together at 10 and 12 for England's last eight games without ever really making a convincing argument for the partnership. England captain Farrell has been in superb form at flyhalf for Premiership leaders Saracens this season.
Lawrence gets the chance to stake a claim for the inside centre slot that has for so long been a problem for England, with Slade back from injury replacing Joe Marchant (26) at outside centre.
Lawrence has been in impressive form since moving to Bath at the end of last year after his club Worcester went into administration.
He was not initially included in Borthwick's first training squad but was added later and came off the bench five minutes from the end of last week's defeat by Scotland.
Winger Henry Arundell (20), who scored a brilliant try with his first touch on his debut against Australia last summer but has been sidelined through a foot injury since October, comes in for Anthony Watson (28).
Flanker Jack Willis (26) will make his first start since suffering a horrific knee injury in the same fixture two years ago.
The turnover specialist replaces Ben Curry (24) in the only change to the pack and though he plays for French club Toulouse, he has been cleared to play for England under the "special circumstances" rule after he was one of the players left without a club when Wasps went bankrupt last year.
With Ben Youngs (33) left out of the squad, replacement scrumhalf Alex Mitchell (25) looks set for a second cap, after routinely being in training squads, with Jack van Poortvliet (21) again the starting nine.
Despite Italy's battling display in narrowly losing to France in Rome last week, England will expect to kick-start their campaign with a victory against a team they have beaten in all 29 of their previous meetings.
England team to play Italy:
15. Freddie Steward (Leicester Tigers, 18 caps)14. Max Malins (Saracens, 15 caps)13. Henry Slade (Exeter Chiefs, 52 caps)12. Ollie Lawrence (Bath Rugby, 8 caps)11. Ollie Hassell-Collins (London Irish, 1 cap)10. Owen Farrell (Saracens, 102 caps) (C)9. Jack van Poortvliet (Leicester Tigers, 8 caps)1. Ellis Genge (Bristol Bears, 44 caps) (VC)2. Jamie George (Saracens, 73 caps)3. Kyle Sinckler (Bristol Bears, 57 caps)4. Maro Itoje (Saracens, 63 caps)5. Ollie Chessum (Leicester Tigers, 6 caps)6. Lewis Ludlam (Northampton Saints, 15 caps)7. Jack Willis (Toulouse, 6 caps)8. Alex Dombrandt (Harlequins, 10 caps)
Replacements: 16. Jack Walker (Harlequins, uncapped)17. Mako Vunipola (Saracens, 75 caps)18. Dan Cole (Leicester Tigers, 96 caps)19. Nick Isiekwe (Saracens, 9 caps)20. Ben Earl (Saracens, 14 caps)21. Alex Mitchell (Northampton Saints, 1 cap)22. Marcus Smith (Harlequins, 18 caps)23. Henry Arundell (London Irish, 3 caps)