Rio de Janeiro in Brazil has been selected as the host city of the 2016 Olympic Games - the first time ever that the Games have been given to a South American nation.

The announcement was made at the International Olympic Committee meeting in Copenhagen, Denmark, during a day of high drama.

In a surprise move, hot favourite Chicago was eliminated during the first round of voting, followed by Tokyo in the second, leaving the IOC members having to choose between Madrid and Rio in the third and final round of voting.

Brazil's president, Luiz Inácio Lula da Silva, has backed the bid from the start and was part of the delegation making the final pitch to the IOC committee in Copenhagen.

Rio had the largest proposed budget of the four cities. In its final presentation, the team revealed that it estimates to spend US$14.4bn (€10m, £9m) to host the games, with $11.6bn (€8m, £7.3m) earmarked for construction and infrastructure costs alone.

The Rio Games will use 34 venues, including 18 existing facilities, many along the city's picturesque beaches.

Some of the facilities - including the 90,000-seater Olympic stadium - is already being renovated for the FIFA Football World Cup, which the city will host just two years before the Olympics, in 2014.

President Lula emphasised that the entire budget was underwritten by the government.

"Brazil is a country confident in its future, which is in a magical moment of growth, economic improvements and we have a population completely passionate about sports," he said.

"Among the ten largest economies in the world, Brazil is the only country, until now, that has not held an Olympic Games."

Legacy guarantees include infrastructure and transport projects, public works investment, use of sports facilities and non sports venues owned by the federal government, increasing the capacity of airports, financial support for revitalizing Rio's port zone and opening lines of credit to finance the Olympic villages.