Beijing won on the second round of a secret ballot, by receiving 56 votes.
It defeated Toronto (22), Paris (18) and Istanbul (nine). Osaka was eliminated in the first round of voting, with six votes.
While the Chinese capital erupted into celebrations, the decision is expected to spark protests from human rights activists across the globe.
Wang Wei, secretary general of the Beijing bid committee, said awarding the Games to China would accelerate economic growth and enhance the quality of life in China, including human rights.
The decision is also expected to anger a bipartisan coalition of US politicians which this week asked the International Olympic Committee (IOC) to reject the Beijing bid.
Tibetan groups have also protested on the doorstep of the IOC in the Swiss city of Lausanne and this week Russian police detained nine people after a similar demonstration in Moscow on Wednesday. IOC members received threats, warning them of attacks if they vote for Beijing.
Many believe retiring IOC president Juan Antonio Samaranch wanted to make a grand political gesture by taking the Games to China before he stands down and his successor is elected on Monday.
Sportbusiness.com will continue to bring you all the reaction from the decision.
