The decision to hold the event in the Tyrolean capital was read out by International Olympic Committee (IOC) President Jacques Rogge. 

Innsbruck beat off the challenge of Finland's Kuopio for the right to host the Youth Games, which are a personal project of Rogge in his mission to fight obesity and encourage young people to take part in sports.

The Chinese city of Harbin and Norway's Lillehammer were eliminated last month after failing to make the final cut.

An estimated 1,000 athletes aged 14-18 will compete over 10 days in seven sports: skiing, ice hockey, biathlon, bobsled, curling, luge and figure skating.

The opening ceremony is due to take place on January 13, 2012.

Rogge said: “We are fully aware that this is a very short period, but we are extremely confident that Innsbruck can match the expectations of both the IOC and the athletes, including an attractive Culture and Education Programme, which is an integral part of the Youth Olympic Games experience."

Innsbruck, host of the 1964 and 1976 Winter Olympics, was the strong favourite to win the right to host the inaugural Winter Youth Games after receiving the best rating in the IOC Evaluation report at the start of November.

The Austrian bid has a budget of $22.5 million (£15 million) compared to just $13.9 million (£9.3 millon) for Kuopio, a figure described as "extremely low" by the IOC.

The winning city was decided by a secret postal ballot of more than 100 IOC members.

Christoph Platzgummer, the president of the successful bid, said: "We feel very proud and fortunate about the IOC members decision.

"The Winter Youth Olympic Games in Innsbruck will be a memorable and a unique experience for all parties involved."

The first Summer Youth Olympics will be held in Singapore in 2010.