Needing victory to guarantee top spot in European qualifying Group I, goals from Everton star Gylfi Sigurdsson and Johann Gudmundsson ensured Iceland would be on the plane to Russian Federation 2018, Foxsport.com reported.
Iceland got through to the quarter-final stage before their fairytale run was ended by hosts and beaten finalists France 5-2.
"This is an incredible achievement.Egypt hasn't gone to a World Cup since 1990 and it has been a source of national shame that the Pharaohs had not qualified despite being arguably being the best team in Africa over much of the past decade", said author James Montague.
Icelandic football team has not enjoyed notable success until the 21st century and it was exactly in the previous World Cup qualifiers - for the 2014 edition in Brazil - that the football world first took notice of Vikings.
Iceland managed to finish top of a hard World Cup qualifying group that included Croatia, Ukraine and Turkey and they will now hope to defy the odds and get out of the group stages at the tournament itself.
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Victory over Kosovo last night secured Iceland a place in next summer's Russian tournament.
Group rivals Italy, already guaranteed second place and a playoff spot, won 1-0 in Albania.
Iceland is officially going to the 2018 FIFA World Cup finals in Russian Federation.
Serbia booked their place in the finals thanks to a 1-0 win against Georgia, with substitute Aleksandar Prijovic's strike on 74 minutes proving the difference.
Despite gleaning only a single point from their first ever qualifying campaign, Kosovo's coach Albert Bunjaki said Iceland's success could be an inspiration to his fledgling team.
Needing a win to grab second place in the group, the home side took control, wasting two great chances around the half-hour mark, with Taras Stepanenko driving a powerful shot outside the post and Yevhen Konoplyanka heading just wide moments later.