The World Rugby Council will vote on the proposals of the Rugby World Cup Board on 15 November.
Bill Beaumont, head of the sport's governing body World Rugby, said South African organisers had impressed fact finding missions with their financial assurances for hte event and the qualifty of the venues.
"The comprehensive and independently scrutinised evaluation reaffirmed that we have three exceptional bids," said Beaumont. "But it also identified South Africa as a clear leader based on performance against the key criteria, which is supported by the board in the recommendation."
South Africa first hosted the World Cup in 1995. Their team – watched by President Nelson Mandela - beat New Zealand in the final at Ellis Park in Johannesburg to lift the Webb Ellis trophy for the first time. South Africa also won the title in 2007 in Paris.
"This nomination is confirmation of that belief and reward for an outstanding bid in which no detail was too small to be addressed or any question not comprehensively answered," said South Africa Rugby chief executive Jurie Roux.
"We are 100 percent confident that the commitments we made in our document will be delivered. We will make all of world rugby proud of South Africa 2023."
Irish organisers, who are hoping to put on the event for the first time, admitted they were disappointed with the Rugby World Cup Board's recommendaton.
Dick Spring, chairman of the Irish bid, said: "There is nothing in the report which is insurmountable and this is certainly not the end of the road.
"Our team will compete to the final whistle as we bid to turn our historic bid plans into reality."
Bernard Laporte, the president of the French Rugby Federation, said he believed it was now a two horse race.
"A final is taking shape in which France and South Africa will go head to head," said Laporte. "A new match is beginning and will play out until the vote on 15 November."