The move across fresh chicken products has been praised by groups such as the RSPCA and Compassion in World Farming.
The trial follows research which showed 71% of shoppers wanted more information on how the chicken they buy is reared.
It comes as Lidl continues to commit to sourcing all of its fresh chicken from UK farms by October.
The labelling which was being rolled out on Friday displays one of the following messages:
- Indoor - Birds are reared outside the UK to legal housing requirements
- British Indoor - Birds live in safe, comfortable housing with natural daylight, bales, perches and pecking objects
- British Indoor+ - Birds live in housing with more space to exhibit natural behaviour; with natural daylight and environmental enrichment
- British Free Range - Birds live in safe, comfortable housing with access to the outdoors for a minimum of eight hours a day
- British Organic - Birds have access to large outdoor ranges, with smaller flock sizes and a GM-free diet.
Lidl said if the trial is successful it will roll the labelling out across other meat products.
The hope is that the move could help customers make more informed decisions about where their meat comes from.
The level of detail on the new labelling is now similar to that found on egg packaging.
Research has shown two thirds of consumers find this type of labelling detailed and transparent, helping them understand how the chickens laying them were kept.
Amelia Womack, deputy leader of the Green Party, said: "This is a good first step, but we need to see such labels on all meat, not just chicken, in all shops.
"Consumers want to know under what animal welfare and husbandry conditions their meat was produced, and not just meat.
"When it comes to fruit and vegetables, grains and oils, consumers also should be able to make choices based on knowledge of the conditions under which it was produced and their
impact on our desperately depleted natural world."
Ryan McDonnell, chief commercial officer of Lidl, said: "To ensure that we are continuing to make good food accessible for all households, it's important that we offer customers quality
meat products that are from a range of different farming systems.
"With method of production labelling having been in place for a number of years on egg packaging, it makes sense to us to apply the same concept to meat products."
Sophie Elwes, senior scientific officer for farm animals at the RSPCA, said: "We are delighted Lidl is taking this step to ensure that labels on their fresh chicken clearly shows the method of
production and we applaud them for being the first retailer in Britain to voluntarily do this on chicken.
"This is such an encouraging move as the RSPCA has long campaigned for method of production labelling to be made mandatory on animal products and we hope that other retailers will
follow Lidl's lead."
The move comes after concerns from groups such as the British Egg Industry Council that, following a no-deal Brexit, the UK could be flooded with meat and egg products from countries
with significantly lower animal welfare standards.