The designer - who was included in TIME magazine's annual 100 most influential people list - was captivated by the model the second he saw her and instantly knew she had what it took to be a star.
Michael admitted to Vogue.co.uk: ''When I first saw Yasmin Le Bon, I thought she was really, really fabulous looking.
''I was so intrigued by her looks that I asked the editor of New York Magazine at the time, 'Who is this girl?'
''And she replied, 'Yasmin Parvaneh.' And I said, 'She's fabulous.' ''
Michael believes it takes more than just good looks to make a successful model and says the British-Iranian beauty possesses that special something which can bring a fashion campaign to life.
He said: ''The first thing for me as a designer has never been, 'Oh, look at your dress.' Or, 'That's the craziest pair of shoes I've ever seen.'
''My job is to be the framer and the woman is the picture. That's one of the reasons I've always loved women and models with their own personalities.''
Michael and Yasmin will give a talk together at the Vogue Festival in London on Saturday April 27.