The decision was announced during the 115th session of the International Olympic Committee in Prague with the governing body's 126 members voting on presentations from three bidding cities.
Vancouver beat off competition from the Korean city of PyeongChang and Salzburg in Austria to land the host city status.
Salzburg was eliminated from the race following the first round of votes leaving Vancouver and PyeongChang to fight it out with the Canadian city emerging victorious.
The decision to award the 2010 Games to Vancouver impacts severely on New York's chances of landing the 2012 Summer Olympics given the IOC's noted reluctance to award two consecutive Games to the same continent.
As a direct result of this scenario, Vancouver is thought to have received a landslide of votes from the European IOC members of whom there are 58. The Canadian city needed a minimum of 52 votes to secure the host status.
With Vancouver hosting the 2010 Olympics, the likes of Paris, London and Moscow have emerged as the front runners for 2012.
The city of 514,000, situated in British Columbia province in western Canada, will use the Rocky Mountain resort of Whistler, 90 miles away, for many of the events in 2010.
Seven sports venues are already in place, including the 50,000-capacity BC Place which should hold the opening and closing ceremonies indoors for the first time.
The General Motors arena, which is home to NHL side Vancouver Canucks is expected to be another important venue, while another six venues will be built.
Much of the focus of the Vancouver bid has been on improving the transportation links between the city itself and the Whistler resort.
The bid's organisers said that a successful bid would bring $10billion in direct investment which would be used to further develop the region's transport and tourist infrastructure.
