The decision was made following detailed consultation with the British Handball Association (BHF).
"We are extremely pleased to be able to confirm that the British Handball Association has proven to us that they will maximise the opportunities that come with participation at a home Games to make a step change in their sport that will also have a lasting legacy for handball," said BOA chief executive and Team GB Chef de Mission Andy Hunt.
"British male and female handball players are competing in high level club competition in Europe and getting the experience they need to deliver a credible performance at the London 2012 Olympics.
"I am confident handball will be using the experience of London 2012 to ensure sustained competitive excellence and use it as a platform to qualify by right for future Olympics as well as a springboard for growth and capturing the interest and imagination of the British public."
The BOA has, among its many duties, is responsible for approving the eligibility and entry of all British athletes who compete as members of Team GB at the Olympic Games.
For the London 2012 Olympic Games, the BOA has stipulated that any sport seeking to utilise a Host Nation Qualification Place must first demonstrate the ability to deliver a credible performance during the London 2012 Games and also a long-term strategy to deliver a meaningful legacy as a result of the profile and visibility associated with competing in the Games - with a particular emphasis on increasing opportunities for participation by athletes, coaches, officials and volunteers at the grassroots level.
The decision to permit handball the opportunity to utilise the Host Nation Qualification Places was made by the Olympic Qualifying Standards Panel, which among others include Hunt, the chair of the BOA Athletes Commission Sarah Winckless and the BOA's director of sport Sir Clive Woodward.
"Handball enjoys tremendous popularity throughout Europe and there is no reason it shouldn't be the case in the UK," said Sir Clive.
"I believe that the London 2012 Olympics can be the platform for that growth.
"I have no doubt that handball will do Team GB and their sport proud in 2012.
"I am sure they will seize this opportunity and make the most of it for the long term benefit of their sport.
"I am delighted that the players now know that all the hard work so far has been worth it and that going forward they can concentrate fully on getting ready for 2012."
The Olympic Qualifying Standards Panel is currently working with the National Governing Bodies of Olympic Sport to finalise and approve the qualification standards and pathway to London 2012 for every sport.
In many cases, sports will qualify for the Games through their performance in specific international events.
For a select group of sports, however, the qualification process may involve the use of a Host Nation Qualification Place.
British Handball chief executive officer Paul Goodwin said: "We are delighted with the BOA's decision to endorse both the men's and women's handball teams' participation at the London Olympic Games.
"Today's announcement is testimony to the hard work and dedication of our athletes.
"They have climbed mountains to reach this point and know only too well the challenges that lie ahead.
"Since embarking on this Olympic journey British Handball has always delivered on its promises and we are convinced that our athletes will deliver a credible performance in 2012 and that the British public will not be disappointed."
Lorraine Brown, British Handball performance director, said: "The announcement today is fantastic recognition of the progress made by the GB handball teams over the past four years and vindication of the hard work, dedication and commitment shown by the players who never lost sight of their Olympic Dream against the backdrop of funding cuts in 2009.
"Although everyone in the GB Handball performance programme recognises that there is still a lot of hard work to be undertaken in the next 18 months to ensure we maximise the time remaining, the trust and support shown by the BOA in our plans is tremendous news."
Bobby White, goalkeeper of the GB men's team, currently playing professional club handball for Kydon on Crete in the Greek League, said: "It is fantastic news that the BOA has given us the opportunity to compete at the London Olympics.
"There has been a great deal of hard work from everybody involved in British Handball, none more so than the players that have continued to fight and improve when circumstances were against us.
"Now we can focus solely on what we can control, and push on even further.
"In 2012 we will have the chance to show the British public what an incredible sport handball is and show the international handball community what can be achieved in such a relatively short amount of time, considering where we started!"
Women's team member Dani Sposi, who is currently playing for Ruislip Eagles in the English National League, added: "It's fantastic news to hear that we are going to compete for our country at London 2012.
"We have been working very hard and have been dedicated to the dream of competing in London for the past four years.
"Being part of Team GB is a great honour and we are pleased the BOA saw in our team a credible group of athletes as well as a great opportunity for British Handball.
"We will be based in London later on this year to intensify our training and be ready to produce inspiring performances for the public, for the sport and for the legacy we would love to leave behind for the next generation of handball players."
Team GB players can now look forward to competing at the Handball Arena in the Olympic Park, with the ODA confirming that the upper tier of 3,500 seats has now been completed and the last of the sustainably-sourced copper cladding fitted on to the unique roof.
Work is moving ahead inside the venue, with the remaining 3,000 retractable lower tier seats to be installed once the sprung wooden court surface is completed next month.
A webcam has also been installed at the area, allowing people to see the progress made to date.
ODA chairman John Armitt said: "The Handball Arena is one of the most compact on the Olympic Park, with legacy and sustainability very much integrated into the design process.
"Progress is moving ahead at an impressive rate, with over half of the seats already in place and work under way installing the sprung wooden floor."
November 2010: Deal takes handball step closer to becoming legacy sport of 2012 Games
December 2009: British handball still faces obstacles despite cash boost
December 2009: Minor sports winner as funding for Olympics doubled
October 2009: IOC to help fund British Handball preparations for London 2012
September 2009: International officials promise to help British Handball