Ukrainian entry Kalush Orchestra triumphed at this year’s competition in Turin, Italy, but the European Broadcasting Union (EBU), which produces the annual event, decided the event cannot be held in the war-torn country following Russia’s invasion.
The UK was given the chance to host Eurovision for the ninth time, more than any other country, after Sam Ryder came second in the competition.
London was one of the 20 cities who submitted an “expression of interest” to host, with applicants demonstrating how they would reflect Ukrainian culture, music and communities.
Earlier this week, London mayor Sadiq Khan had said the capital should be chosen as the host.
“I’m really excited Eurovision is coming to the UK and, actually, whether it’s in another part of the UK or London it’s really important that we do Ukraine proud,” he said.
“It’s a fact, though, that the largest number of Ukrainians here live in London. It’s also a fact that there are many Londoners of Ukrainian origin and this is going to be Eurovision hosted by Ukraine in another city in the UK. Clearly it’s got to be London.”
The cities that bid to take part were judged on various criteria, including having a venue that can host at least 10,000 people and access to an international airport.
The announcement sparked a fierce debate on social media with many people arguing London should have made the cut.
Joe Hudson-Small, a software developer, said: “Even if other cities can accomodate it, London should still be at the top of the list for having the largest Ukrainian population imo.”
Another Twitter user simply wrote: “Where tf is London.”
After the shortlist was announced, Kate Phillips, the BBC's director of unscripted content, said: "We would like to thank all of the cities and regions that submitted bids to host next year's Eurovision Song Contest. We have seven fantastic cities who we are taking through to the next round.
"Congratulations to Birmingham, Glasgow, Leeds, Liverpool, Manchester, Newcastle and Sheffield - it's exciting to see such a breadth of bids going through from across the UK.
"We are committed to delivering a truly unique Song Contest that celebrates wonderful Ukraine and champions British music and creativity in all its diversity."
Ukraine will automatically qualify for the Eurovision grand final alongside the so-called big five nations - the UK, France, Germany, Italy and Spain - who each get a free pass because of their financial contributions to the event.
On Friday, UK-based think tank and charity British Future called for Ukrainian refugees and their UK host families to be given "priority tickets" to Eurovision 2023.
The host city is expected to be announced by the autumn.