But Manchester, already committed to hosting the 2002 Commonwealth Games, will have a new 60,000-seater stadium and a swimming venue.
The long-expected decision to choose the self-styled Venue of Legends rather than the Manchester bid was confirmed by the UK Sports Council chairman, Sir Rodney Walker. The decision appeared a formality after Wembley's endorsement in October by the Football Association, the Rugby Football League and the British Athletic Federation.
Wembley's legends, and its siting in the capital, are factors which have a deep significance among world sporting bodies. Plans will now go ahead to bid for the World Cup, the Olympics and athletics' world championships in the next century.
National Lottery funding will provide almost half of the cost of the planned pounds 210m to pounds 230m transformation of the most famous sporting site in the country, of which only the Twin Towers will remain of the present fabric.The Sports Council has said it will hold a competition for the redesign of the stadium, but Sir Norman Foster's futuristic design, which incorporates a retractable roof, is already linked with the successful bid, and has been favourably received. Work is due to start in 1998 with a target completion date of 2000.
Manchester's battered pride was soothed when Walker also announced that pounds 60m would be made available to go towards the cost of the Commonwealth stadium. Manchester will also receive pounds 20m towards a major new swimming complex.
The arrangement has raised optimism among British sporting administrators over attracting major events to these shores.
Graham Kelly, the Football Association's chief executive, said the chances of England hosting the World Cup in 10 years were now "very good indeed". He added: "We will be able to put together an excellent bid when the time comes in 1998 to put the finishing touches to it."
The first major world event at the new Wembley could come even sooner, with the BAF now preparing to make a formal application to stage the 2001 World Championships. "We can now go ahead with some confidence with our application to stage the world championships in Britain for the first time," said the BAF spokesman, Tony Ward.
"The indications are that the International Amateur Athletic Federation would look pretty strongly in favour of our bid for 2001 and we could be looking at staging the first major international sporting event of the new century in Britain.
"And if the World Cup came here in 2006 followed by the Olympics in 2008 or 2012, what a fantastic boost that would be for the country."
Some of the criticism of the expected choice of Wembley had revolved around access, but Wembley's spokesman, Martin Corrie, stressed that this was already being addressed. "Together with Brent Council we've already put together a masterplan for the regeneration of the area around Wembley, and the link road we wanted to lead from the stadium to the North Circular Road is already under way."
Because Wembley is a PLC, it cannot apply directly for the lottery funding, and a special Stadium Trust has been set up.
The Sports Minister, Iain Sproat, welcomed the announcement, which fits alongside the proposed development of a National Academy of Sport, the main site of which is expected to be made public in spring of next year.
"Today's announcement, alongside the progress being made to develop a British Academy of Sport, will give our sportsmen and women some of the best facilities in the world," Mr Sproat said.
The Rugby Football League spokesman, Dave Callaghan, also welcomed the decision to site the National Stadium where Challenge Cup finals have been played since 1929, but he stressed that big matches, including Stones Premiership finals and Test matches, would continue to be held at Old Trafford. Manchester could also be witnessing some other cup action in the medium term. Kelly admitted that the rebuilding work will mean the FA will have to look elsewhere to stage England games and FA and Coca- Cola Cup finals during that period.
There was, however, disappointment in Manchester, which together with Wembley had seen off rival bids from Birmingham, Bradford and Sheffield.
Anthony Goldstone, president of the Manchester Chamber of Commerce and chairman of the North West Tourist Board, said it was "a wrong decision - the National Stadium should have been in the north of England." Robert Huff, chairman of the Commonwealth Games Committee, described it as a "satisfactory result", adding: "Clearly this was a race for the National Stadium and it would have been wonderful to have had it in Manchester. But this is still a glittering prize."