The Australian bid saw off competition from Hambantota, Sri Lanka, the tsunami-ravaged city that had hoped to use the games to spur reconstruction.
Instead, delegates at the Commonwealth Games Federations' General Assembly voted 43-27 in favour of Gold Coast.
It will be the fifth time Australia has hosted the games, with previous editions taking place in Sydney in 1938, Perth in 1962, Brisbane in 1982 and Melbourne in 2006.
Queensland Premier Anna Bligh was on hand in St Kitt's for the announcement and expressed her delight at the result.
"It's been a very, very close vote and there was a good chance we weren't going to make it, but all of the hard work has paid off," she said.
"I'm so proud of this team, so proud of the Gold Coast, and so proud of being a Queenslander tonight."
The Gold Coast was seen as a clear favourite to get the nod, with a vote for Hambantota requiring a leap of faith from delegates.
Sri Lanka is emerging from the affects of a 26-year-long civil war, while Hambantota was devastated by a tsunami in 2004 and wanted to use the games to focus investment in the region.
The decision to hand the games to Gold Coast means that basketball and triathlon will take their place in the field of 17 sports, the only differences from the Sri Lankan bid which had favoured archery and tennis.
The 2014 edition of the games will be held in Glasgow, and Glasgow 2014 chairman Lord Smith was quick to congratulate Gold Coast.
"I would like to congratulate the Gold Coast in Australia on their successful campaign to be selected as the host city for the XXI Commonwealth Games," he said in a statement.
"Every Games is different and each reflects the particular culture and spirit of the nation and city. There are, however, many opportunities to learn from previous Games and an effective transfer of knowledge is really important, particularly in the early stages of planning for the Games.
"We are looking forward to working with the next Organising Committee and sharing our experience with them."