Zaha Hadid, best known in the UK for the London 2012 Aquatics Centre, the architectural centrepiece of the summer games, has taken first place in a competition to design the new Tokyo National Stadium.

The visually striking submission will replace the current, ageing structure, built in 1958 and which served as the main venue for the 1964 Summer Olympics.

The 54-year old stadium, designed by Mitsuo Katayama and described by the jury chair Tadao Ando as "announcing the birth of a modern Japanese architecture", will make way for a new venue which Ando said would see a modern Japan "reborn".

The stadium is scheduled for completion in 2018, and will play host to the 2019 Rugby World Cup, as well as forming the centrepiece of the 2020 Summer Olympics should Tokyo's bid prove successful.

The choice of Hadid may prove to be a controversial one, however, as the single major sports venue her firm have produced was subject to significant budget overruns. The Aquatics Centre was anticipated to cost £72m, but the final figure spiralled to £270m, a figure which may have been even higher had earlier designs for the venue's temporary "wings" been followed.

With Japan's self-taught, Pritzker-laureate Ando overseeing a jury containing such architecture heavyweights as Lords Foster and Rogers, the former Japan Football Association President Junji Ogura and Ichiro Kono, who led the unsuccessful 2016 Tokyo Olympic bid, the contest required a number of specific criteria to be met, notably the use of adjustable seating and a retractable roof, while establishing a dialogue with its physical surroundings, particularly the Meiji Shrine.

Despite Japan's staggering national debt, the stadium is set to become the world's most expensive venue at current exchange rates. Assuming a construction budget of 130bn yen ($1.62bn/£1.02bn) is fully utilised, it will surpass the $1.6bn paid for the New Meadowlands Stadium, home of both the New York Giants and New York Jets.

Moreover, it will not become the home of any of Japan's major professional sports teams, instead playing host only to a potential future Fifa World Cup, IAAF World Championships and concerts by performers of sufficient standing to fill what will become an 80,000 capacity arena.

The question as to whether a return on investment is a viable prospect when the lifespan of modern venues is 40 years or less remains open, although it should be assumed that it will succeed the Saitama Stadium 2002 as the home of Japan's national football team as the latter continues to be devilled by problems with public transport.

The competition, in which submissions were invited from firms which had both experience in the design of a minimum 15,000 capacity stadium and had won one of five major architecture awards, carried a prize of 20m yen ($249,532/£157,431), although the prestige associated with being chosen for such a landmark project may outweigh any immediate financial benefits.

The 48 entries were eventually whittled down to a shortlist of 11, including bids from the sport specialist Populous, designers of Wembley Stadium, Arsenal's Emirates Stadium and the London 2012 Olympic Stadium; Australia's Cox Architecture, a major player in the design of Sydney's Olympics venues, and Japan's 2010 Pritzker Prize winners SANAA, one of the two favourites for the competition according to Kenplatz, a Japanese engineering and architecture publication.