Champagne celebrations were launched across the capital on Wednesday after London won the right to host the 2012 Olympic Games ahead of fierce rivals Paris.
London edged the French capital in the closest bidding war in Olympic history to win the right to host the world's largest sporting extravaganza.
"It is just amazing," Kelly Holmes, double Olympic champion said. "It was so nerve-racking, I just cannot believe it."
Olympic athletes threw their arms in the air in delight and hugged each other in Trafalger Square as they watched the announcement in Singapore on a huge screen.
Champagne was sprayed around under Nelson's Column and thousands danced in the streets after the announcement was made.
At the site of the Olympic Park in east London, school children and athletes yelled in delight on hearing the news.
"It is amazing, I can't believe it, I will be the right age to go, I just can't wait," Alex Savin, 11, a junior fencer told Reuters.
London had spent most of the race to host the Games behind front-runner Paris. Former Olympic athlete Sebastian Coe led the campaign with style, gaining the vital support of Prime Minister Tony Blair and the backing of the majority of Londoners.
The bid organisers highlighted the city's multicultural appeal and the passion of its people for sport as their reason to host the Games.
The city had previously staged the Olympic Games in 1908 and 1948.