Profits were in line with analyst forecasts and just below an all-time high of £1bn achieved in 1998.
Workers at the retail giant are also in line to share a record £91m bonus pot, up from £73m last year.
Stuart Rose, chief executive of M&S said: “We have had a good year, delivering a 10% increase in sales to a record level of £8.6bn. We have grown profits by more than £200m.
“We are also starting to broaden the business, by stretching the brand into new product areas, expanding space, driving our direct business and growing our brand internationally. This expansion will create up to 10,000 new jobs in the UK over the next three years.
“Our record bonus of £91m includes a £26m reward for our store customer assistants.”
Rose added: “We have announced a number of senior management changes and have a strong team in place to lead the group through its next phase of growth.”