The event will be held in place of the Champions Trophy that was to be hosted by West Indies in 2010, ICC chief executive Haroon Lorgat said at a press conference.
"With the Champions Trophy set to be hosted by Pakistan in 2009 after its cancellation this year, we decided to have a Twenty20 World Championship instead in April-May 2010 in West Indies," he said.
"Although World Twenty20 is to be held every second year, we decided to hold it on the trot to set the calendar right and ensure a better spread of tournaments."
The event, slated to be held from April 23 to May 9, will be staged at three venues to be chosen by the ICC Board in January 2009 following nominations from the West Indies Cricket Board.
"With the ICC Champions Trophy being the final major ICC event of 2009, and the ICC Cricket World Cup being the 50 over event in 2011, it makes perfect sense to have a tournament of a different format in between," Lorgat said.
"It means we will avoid staging the ICC Champions Trophy and the ICC Cricket World Cup close together, as happened in 2002-03 and 2006-07.
"We will aim to make both those events special to ensure we have a great blend of the ICC's three majors, with two ICC World Twenty20s (2009 in England and 2010 in the West Indies) as well as an the ICC Champions Trophy (in 2009) and an ICC Cricket World Cup (in 2011) over the next three years."
India won the inaugural World Twenty20 Championship in South Africa in 2007.