France's bid, which centres on Le Golf National course outside Paris, successfully beat out rival bids from venues in Germany, Portugal, the Netherlands and Spain.
French bid officials burst into applause as European Tour chief executive George O'Grady confirmed their victory by a "clear but narrow margin" in an announcement at Wentworth Golf Club outside London.
The 2018 event will be only the second Ryder Cup ever held on continental Europe following its staging in Valderrama, Spain in 1997, when Ballesteros masterminded a dramatic victory over the United States.
Relatives of Ballesteros, who died earlier this month three years after being diagnosed with a brain tumour, had urged officials to back Spain's bid as a fitting tribute to the 54-year-old icon.
"It would have made my brother very happy, for it was one of his dreams," Baldomero Ballesteros said last week.
In a clear signal that the Tour was leaning away from the Spanish bid, a statement released just hours before yesterday's vote said officials were studying a range of options for a permanent tribute to Ballesteros.
Among options being considered are changing the European Tour logo to an image of Ballesteros, the European Tour said in the statement.
In opening remarks ahead of the French victory, O'Grady said the decision had been taken in "full recognition of [Ballesteros's] immense contribution and leadership" of European golf.
O'Grady later rejected suggestions that the decision to award the event to France represented a "missed opportunity" to honour Ballesteros.
"I don't think it's a missed opportunity at all in the sense that we've been well aware of the legacy of Severiano Ballesteros right from the beginning of this bidding process," O'Grady said.
"Every thing we do as a European Tour is to honour him. I don't think this is going to be the last Ryder Cup that will be played in most of our lifetimes, it's just that at the moment the French bid was outstanding.
"We feel for Seve, we feel for what we stood for, but we've been aware of his terrible illness for quite some time and we were aware of it at the beginning [of the bidding process]."
Central to the French bid was the fact that the lion's share of funding will come from revenue collected from a small increase over the next few years in the annual golf assurance licence taken out by registered players in France.
On top of that the bid enjoys strong state backing including President Nicolas Sarkozy, who has deemed it to be a priority for French sports along with the Euro 2016 football tournament and a possible Winter Olympics in Annecy in 2018.
That has opened the way for cultural icons as the Chateau of Versailles, the Eiffel Tower and the Louvre museum to be used as high-profile venues for the week-long activities surrounding the Ryder Cup.
The fact that the event is within easy reach of Paris also made the French bid attractive from a tourism and infrastructure perspective.
Paris remains a hugely popular destination for American tourists, a factor expected to boost the galleries at the 2018 event.
The next Ryder Cup will be held outside Chicago, Illinois next year before the event goes to Gleneagles, Scotland in 2014.