South Africa was the first to be eliminated, before New Zealand beat Japan in the decisive second round of voting.
New Zealand hosted the World Cup in 1987, South Africa in 1995 while Japan had been hoping to host it for the first time.
The decision will disappoint many that were backing Japan to win, seeing this as an opportunity to help spread rugby to other parts of the world.
New Zealand lost the right to host the competition in 2003 (which went to Australia exclusively) after failing to provide assurances that venues would be clean of all advertising and sponsorship not connected to the World Cup.
Its bid had drawn on the huge popularity of rugby union in the country and it successfully hosted the recent British and Irish Lions tour.
IRB chairman Syd Millar said: "I would like to congratulate New Zealand, a great rugby nation.
"We received three excellent tenders of the highest quality. Any one of the three could have hosted a successful tournament."
