The 2018 Commonwealth Games are expected to generate around $A2 billion and 30,000 jobs for the Gold Coast and Queensland.
The Commonwealth Games Federation on Friday voted 43 to 27 in favour of the Gold Coast bid.
Hambantota in Sri Lanka was the other candidate. The town was devastated by the 2004 Asian tsunami.
Prime Minister Julia Gillard, who is at an APEC summit in Hawaii, said the games will bring economic benefits to the state and the entire nation.
She congratulated Queensland on winning the bid.
Federal Treasurer Wayne Swan says it is a much-need boost for the region.
The ABC reports that more than $A500 million will be invested in sport and transport infrastructure.
The event is expected to attract 60,000 interstate, 60,000 international visitors and 10,000 officials.
The Games are scheduled to take place in April 2018.
The next Games, in 2014, are to be held in Glasgow.
Australia has hosted the Games four times previously.
