There is also provision for a new World Snooker Academy, to be established within the English Institute of Sport Sheffield in the Lower Don Valley.
Sir Rodney Walker, chairman of World Snooker, said: "This is excellent news for snooker, and I believe for Sheffield, which will now become the home for snooker, something we have wanted for a long time. We will hold our World Championship here and the new Academy is where we will be able to groom the next generation of players. This will now become central to our development plans.”
Councillor Jan Wilson, leader of Sheffield City Council, said: “The World Snooker Championship brings in the region of £3million each year to the city's already thriving economy and is a wonderful chance to showcase Sheffield across the world."
The announcement by Sir Rodney Walker follows an intense bidding process involving six cities.
The cities, believed to include Liverpool, Manchester and Birmingham - expressed an interest, with three submitting fully-costed bids to host the championship.
Sheffield has hosted the World Championship since 1977 and the Crucible Theatre venue will shortly undergo a multi-million pound update, £4million of which has been provided by the Arts Council.
The cost of the upgrade could hit £10million although the seating capacity is expected to remain unchanged.
The tournament will stay at the Crucible Theatre for the foreseeable future, although organisers will investigate building a new venue.
