Price was the only PGA Tour player on the ballot to be elected. He was chosen on 76 percent of the returned ballots and will be inducted Oct. 20 at World Golf Village.
"I am honored to be elected into the World Golf Hall of Fame," Price said in a statement. "To be in the same company as this elite group is a great privilege."
Tom Kite fell short of election, receiving votes on 59 percent of the ballots, less than the 65 percent required.
More than 80 percent of the PGA Tour ballots sent out were returned and nearly 70 percent of the international ballots were received before the deadline. None of the international candidates was elected.
Ayako Okamoto was chosen on 46 percent of the ballots. Fellow Japan native Isao Aoki was named on 45 percent.
A member of the PGA Tour since 1983, Price was born in Durban, South Africa and raised in Zimbabwe. He established himself as a promising newcomer, first on the Southern African Tour and European PGA Tour.
From his breakthrough victory at the 1992 PGA Championship through the end of the 1994 season, Price captured 16 world titles.
He won The Players Championship in 1993 and took both the British Open and PGA Championship in 1994. In doing so, he became one of only six players to win back-to-back majors since World War II. The victories propelled Price to the top position of the World Rankings in 1994 and 1995.
With his win at the 2002 MasterCard Colonial, Price has tallied 18 PGA Tour victories and 23 international wins.
"Achievement, on and off the course, has marked Nick Price's career," Finchem said. "Nick will always be remembered for one of the dominant stretches in PGA Tour history and this honor is an important part of his legacy."
Price has also collected two PGA Tour money titles and two PGA Tour Player of the Year awards in 1993 and 1994 and two Vardon Trophies (1993, 1997).
"Nick Price's successful playing career has earned him this mark of distinction," Hall of Fame Chief Operating Officer Jack Peter said. "We are proud of his accomplishments and look forwartd to welcoming him into the Hall of Fame in October."
Other 2003 inductees include Leo Diegel, who was selected through the Veterans category, and Chako Higuchi, who was selected through the Lifetime Achievement category.