'Of all the awards, nothing can top this,' Nelson said.
Nelson was elected on the PGA TOUR ballot by getting 65 percent of the vote, the minimum required.
He will be inducted Oct. 30 at the World Golf Village in St. Augustine, Fla., along with the late Henry Picard, selected through the veteran's category; and Vijay Singh, who deferred his induction after being elected last year. That will bring membership in the Hall of Fame to 112.
Nelson's election came in his 11th year on the PGA TOUR ballot, and in many respects, it was overdue.
He won the PGA Championship twice and the 1983 U.S. Open at Oakmont, joining Jack Nicklaus, Tom Watson and Seve Ballesteros as the only players to capture three majors in the 1980s. Nelson played on three Ryder Cup teams, posting a 9-3-1 record and becoming the only player to go 5-0 in a Ryder Cup.
But he was passed over as U.S. captain the last four times, with the PGA of America opting for Tom Lehman for this year's matches.
'This honor is so far greater than that,' Nelson said. 'I don't relate the two things. This has to do with my career. The Ryder Cup captain has to do with three or four people deciding who does that for the year.'
Picard, who died in 1997, won 26 times on the PGA TOUR, including the 1938 Masters and the 1939 PGA Championship. He later became a teacher, with Hall of Famer Beth Daniel among his pupils.
No one was elected from the International ballot, with Jumbo Ozaki heading the list with 46 percent of the vote. An inductee from the Lifetime Achievement category is expected later this spring.
Nelson was informed of his election three weeks ago, and even for a man who went about his golf so quietly, it was difficult for him to keep this a secret until the announcement at the Legends of Golf tournament in Savannah, Ga.
His road to the Hall of Fame is unlike any other.
Nelson's joy was baseball as a kid, and he thought golf was a sissy sport until he met a burly soldier in Vietnam named Ken Hummel who told him about guys making a living playing golf. Returning from the war, Nelson went to Kennesaw Junior College in Georgia and decided to play golf when he wasn't in class.
He was given Ben Hogan's book, 'Five Lessons: The Modern Fundamentals of Golf,' as a guide, and was encouraged by members at Pine Tree Country Club, where he worked, to try the mini-tours.
'I fell in love with it and got better every day,' Nelson said. 'I was always put in a situation where everyone was better than I was. My motivation was getting better and feeding my family.'
He broke 100 the first time he played, and made it through PGA Tour qualifying school in 1973. Six years later, he won the Jackie Gleason Inverrary Classic by three shots over Grier Jones, then won his first major in 1981 by four shots over Fuzzy Zoeller at Atlanta Athletic Club.
His defining victory might have been the U.S. Open at Oakmont in 1983, when he beat Watson by one shot. Nelson added the '87 PGA Championship at PGA National, beating Lanny Wadkins in a playoff. He ended his career with 10 victories.
'Until I get in front of everyone in St. Augustine will it actually feel it's real,' Nelson said. 'I'm living in a dream world right now.'
What touched him the most Wednesday was a group of Hall of Famers who attended the announcement, such as Hale Irwin, Tom Kite, Charlie Sifford, Tony Jacklin and Carol Mann.
'I don't know of too many people who feel they deserve to be in there,' Nelson said. 'To get the 'welcome' from guys who have accomplished a lot more than you have ... it's like winning another major, as far as I'm concerned.'
Picard won the '38 Masters with a 32 on the front nine, holding off Harry 'Lighthorse' Cooper and Ralph Guldahl, then won the PGA a year later with a birdie on the 36th hole to square his match with Byron Nelson, and a birdie on the first hole to win.
'Henry Picard was one of the country's brightest stars in the decade leading up to World War II, where his victory total compares favorably to the likes of Sam Snead during that span,' PGA TOUR commissioner Tim Finchem said.
The voting body for the World Golf Hall of Fame consists of Hall of Fame members, golf writers and historians, the World Golf Foundation board of directors and members of the Hall of Fame's advisory board.
The Hall of Fame does not disclose vote totals, only percentages.
While he was selected through the veteran's category, Picard received 53 percent of the vote on the PGA TOUR ballot. Two-time U.S. Open champion Curtis Strange received 50 percent, followed by Craig Wood at 37 percent.
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