The competition will be held in the North Rhine-Westphalian city's main arena on May 14.
"Düsseldorf's candidacy was convincing in every way," said ARD chairman Peter Boudgoust said.
Germany won the right to host the legendary kitschy pop contest after teen singing sensation Lena Meyer-Landrut triumphed at this year's Grand Prix in Norway.
Though Eurovision is normally held in the capital of the host country, several German cities had hoped to attract the event. Berlin, Hamburg and Lena's hometown Hannover had all been in the running, but Germany's fractious network of regional public broadcasters created a convoluted selection process.
NDR, the ARD channel responsible for Eurovision, said it had examined several logistical and financial considerations, including what kind of hall would be available, how useful it would be for producing a television show and costs, as well as transport and hotel infrastructure.
The TV executives were excited at the prospect of having up to 24,000 people attend the song contest's practice sessions, semi-finals and final, as well as Düsseldorf's proximity to other European nations.
"The city's is at the centre of a huge region with the Rhine-Ruhr metro area all the way into the Netherlands and Belgium," said ARD's director of entertainment programming Thomas Schreiber.
But Lena, who is likely to defend her title this year, said shortly after she won in Oslo that she had favoured Berlin as the best place to host Eurovision next year.
And Klaus Wowereit, the mayor of the German capital, couldn't contain his disappointment over the decision.
"Berlin presented an extensive and ambitious application and were offering a unique location at Tempelhof Airport," said Wowereit.
The last time Eurovision was held on German soil back in 1983 the competition was hosted by the southern city of Munich.