West Ham was selected to take over the Olympic Stadium after the 2012 London Games, beating out Premier League rival Tottenham and fulfilling Britain's promise to retain a running track at the showpiece venue.
The Olympic Park Legacy Company picked West Ham as its preferred tenant for the 537 million-pound ($867 million) stadium, which will stage the opening and closing ceremonies and track and field competition in 2012.
OPLC chairwoman Baroness Margaret Ford said the decision by the 14-member board was unanimous.
The decision, which followed months of fierce debate and rancor between the two clubs, still requires ratification by two government departments and the London Mayor's office.
"We are confident that this represents the very best legacy for the stadium," Ford said. "It's good for the community of East London, it's great for Londoners, its excellent news for the UK taxpayer and it's a good outcome for sport."
West Ham plans to downsize the stadium from 80,000 to 60,000 seats and use it as a multipurpose venue that includes the Olympic running track. The Hammers hope to move into the stadium from their current Upton Park home in nearby east London in August 2014.
"Today is a momentous day," West Ham vice chairman Karren Brady said. "We are proud to have been passed the Olympic torch and fully embrace the responsibility we have for keeping the flame alive."
Tottenham, bidding with American sports and entertainment giant AEG, had proposed taking down most of the stadium and putting up a 60,000-seat football-only stadium on the same site without a track. Tottenham's plan had been widely criticized by Olympic officials and athletes.
London Olympic leaders promised to keep an athletics legacy at the stadium when they made their successful bid to the International Olympic Committee in 2005.
The IOC welcomed Friday's decision, saying it "paves the way for a great sporting legacy."
Brady claimed this week that Tottenham's plan to tear down the stadium would be a "corporate crime."
Sebastian Coe, the former running great who heads the London Olympic organizing committee, said recently that Britain had a "moral responsibility" to keep the stadium track. He said Britain would "trash" its international reputation if it went back on its promise.
Coe said Friday that he was "delighted" that West Ham's bid had been selected.
IAAF President Lamine Diack, who said recently that it would be "outrageous" to rip out the track, praised the legacy board for making a " very wise decision" that lives up to London's bid promises.
"I have always said that Britain, whose history and legendary athletes have been an inspirational example, deserves a world class athletics venue," he said in a statement.
The British Olympic Association hailed the selection of West Ham as a "victory for athletes, for sport and ... generations of young people."
"This is also a victory for the reputation of British sport globally," the BOA said.
Tottenham has indicated that it could mount a legal challenge to the legacy board's decision.
"We shall continue to monitor the bid process over the coming weeks up until its final determination, whilst reviewing our position and holding discussions with our advisers," Spurs said in a statement after Friday's decision was announced.
In order to provide a track and field legacy, Tottenham had offered to redevelop the crumbling Crystal Palace athletics stadium in south London.
Tottenham and AEG say West Ham's attempt to combine football and athletics isn't economically viable in the long term and the stadium will become a white elephant - especially as West Ham is currently in last place in the Premier League and facing demotion from the top flight.
"It carries with it the major risk of being incapable of delivering a lasting legacy without further calls on the public purse or a requirement for changes to the stadium and track at a later date," Spurs said.
Once the deal with West Ham is ratified, the club must enter into contract negotiations with the OPLC.
If final agreement isn't reached by the start of April, the process could start over again.
West Ham is based closer to the Olympic Park in Stratford, east London, than Tottenham, which plays at White Hart Lane 9 kilometers (51/2 miles) away in a northern suburb.
West Ham is bidding jointly with Newham Council, the local authority which will provide a loan of 40 million pounds ($64 million) to the club.
West Ham also hopes to stage concerts at the stadium in conjunction with promoter Live Nation Entertainment as well as Twenty20 cricket and American football. The stadium refurbishment is expected to cost 100 million pounds ($160 million).