Dubai has been chosen after beating off rival bids from Brazil, Turkey and Russia.
Fireworks exploded from the Burj Khalifa, the world’s tallest building, following the announcement in Paris.
Dubai will be the first Middle Eastern city to hold the Expo, which takes place every five years.
The expo sees hundreds of countries show off the latest in architecture and technology.
The ruler of Dubai, Sheikh Mohammed Bin Rashid al-Maktoum, has promised to astonish the world with the event.
Dubai beat Russia’s Yekaterinburg in the final round of voting in Paris. The other contenders were Sao Paulo in Brazil and Izmir in Turkey.
“We renew our promise to astonish the world in 2020,” said Sheikh Mohammed Bin Rashid al-Maktoum after the win.
“Dubai Expo 2020 will breathe new life into the ancient role of the Middle East as a melting pot for cultures and creativity.”
Dubai authorities say the Expo 2020 will bring in around $23 billion. They say financing for the six-month event will cost a total of $8.4 billion, with the government spending around $6.5 billion on infrastructure projects.
A huge exhibition centre will be built to host the event, plus new hotels and an extension to Dubai’s metro line.
The 2015 Expo takes place in Milan.
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