West Ham United will make the Olympic Stadium their new home from 2016, ensuring that the £430 million venue remains a lasting feature of the city's sporting landscape.
The stadium, the centrepiece of last year's Olympics, will have a 54,000 capacity once it is converted for use by the Premier League club, who have been granted a 99-year lease.
Finding a tenant who can regularly draw big crowds to a once forgotten corner of east London was seen as vital to ensuring the area gets lasting benefits from the billions of pounds invested in it before the Games.
London mayor Boris Johnson told a news conference: "This Olympic stadium will now be the home of a great London football club."
West Ham were named in December as the preferred bidder to move in but Johnson warned that a "Plan B" was being developed in case financial terms could not be agreed.
One of the stumbling blocks to a deal had been who would pay for the stadium to be rebuilt for football.
West Ham will contribute £15 million to conversion costs, with the local council paying £40 million. The government has agreed to pay up to £25 million if more funding is needed for the work.
The London Legacy Development Corporation, the body responsible for the stadium, has also ensured that the taxpayer benefits from any increase in value of the club if owners David Gold and David Sullivan were to decide to sell it within the next 10 years.
Gold and Sullivan said on Friday they had no plans to sell the club.
The stadium stands empty at the moment but will host the world's top athletes at a meeting at the end of July to mark the first anniversary of the London Olympics.
London authorities also plan a series of concerts over the summer to bring the stadium back to life and show that it would not be reliant solely on football for its future.
The club wants to add a new roof to keep fans dry during the winter, executive boxes and retractable seating to go over the running track to let supporters get close to the action.
The running track will remain and the stadium will host the 2017 world athletics championships.
Presented by Adam Justice