Russian people celebrate after Sochi was chosen as the 2014 Winter Olympics host city during the 119th session of the International Olympic Committee (IOC) at the main square of Russian southern Black Sea resort city of Soch, the host city of the 2014 Winter Olympics, July 5, 2007. [Reuters]

In Sochi, cheers erupted from the crowd of more than 15,000 that had gathered for a pop concert and the announcement in a main square.

"We did it all together. We won," the concert's announcer said from the stage as fireworks flashed and boomed in the sky.

People hugged and waved their hands in the air. Some appeared to have tears in their eyes.

"It is great. I've never been so happy in my life," said Marina Matveyeva, 23, who works in a bank. "It means that Russia has reached the level of Europe, and we can be proud of our country."

Russia, an Olympic power which has won 293 Winter Games medals, has never hosted the Winter Games. That was a strong point in Sochi's favor with the IOC, which likes to spread the Olympics to new host countries. Moscow hosted the 1980 Summer Games, which were hit by the U.S.-led boycott following the Soviet invasion of Afghanistan.

The Sochi bid won out over the appeals of its rivals -- Salzburg, presenting itself as a safe, no-risk winter sports mecca at the heart of Europe with world-class venues already in place; and Pyeongchang, offering the potential for peace and reconciliation on the divided Korean peninsula and promoting winter sports in Asia.

Ninety-seven IOC members were eligible to vote in the first round, with 95 casting valid ballots. Members from bidding countries are ineligible to vote as long as their cities remain in contention. With Salzburg out, 100 delegates were eligible in the second round, with 98 casting valid votes.

Putin's government has pledged $12 billion to develop Sochi into a world-class winter sports complex linking the palm-lined Black Sea coast -- the so-called "Russian Riviera" -- to the soaring Caucasus mountains nearby.

Putin, one of the world's most powerful figures, emphasized his commitment by making a rare formal presentation in English to the IOC. He praised Sochi's natural setting, saying, "On the seashore you can enjoy a fine spring day, but up in the mountains, it's winter ... a real snow is guaranteed."

Although the site would have to be built largely from scratch, Putin assured, "We guarantee the Olympic cluster in Sochi will be completed on time."

"No traffic jams, I promise," he said with a smile.

Noting that athletes would have a short walk to their venues, Putin said, "Five minutes' walking distance, not bad."

It was the second straight first-round defeat for Salzburg, which also mounted a failed bid for the 2010 Winter Games, which went to Vancouver, British Columbia.

The Austrians were squeezed out by the political and economic might of the Russian and Korean bids.

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