The runners-up will receive $24 million and all participating teams will receive an extra $1 million to cover their preparation costs.
The decision was announced after FIFA's Executive Committee met on Robben Island, the former prison island where Nelson Mandela was held for 18 years under the apartheid regime.
FIFA president Sepp Blatter and secretary general Jerome Valcke addressed some 250 media representatives taken by ferry from Cape Town to Robben Island, where the announcement was made in the stone-floored former prison hall.
Valcke said the total prize money available to the 32 finalists would be $420 million, up 61 percent from the 261.4 million in 2006.
The semi-finalists would win $20 million, the quarter-finalists 18 million, second-round losers 9.0 million and those eliminated at the group stage 8.0 million.
Valcke said FIFA would also provide $40 million for clubs whose players took part in the tournament.
"Every club who has a player at the World Cup will receive $1,600 per day, per player," Valcke said.
"The money will be paid 15 days before the start of the tournament and to one day after the players' participation in the World Cup ends."
The money will be paid to clubs through their national associations and, as part of the package, clubs have agreed not to pursue claims for any possible compensation through civil courts but only through FIFA or CAS, the Court of Arbitration for Sport.
SIGNIFICANT DAY
Blatter said Robben Island was a significant choice of venue for FIFA.
"Robben Island plays an important part in the story of humanity and this is a significant day for FIFA.
"Robben Island is linked to the story of a revolution by young people in a political system where they had no access.
"When people talk about Robben Island they naturally talk about Nelson Mandela but others were involved like South African president Jacob Zuma who refereed matches here played by prisoners.
"He has now been promoted to the position of honorary referee by FIFA."
FIFA decided to keep their existing Olympic rules for the 2012 London Games, which means that qualifying teams must use players under 23 years old with the exception of three over-age players.
They also ratified the suspension of Iraq from all international football because of government interference in the running of the sport.
