Terry has been ordered to appear in a magistrates court on February 1 over the incident in a Premier League match in October.
Alison Saunders, Chief Crown Prosecutor for London, said: "I have today advised the Metropolitan Police Service that John Terry should be prosecuted for a racially aggravated public order offence following comments allegedly made during a Premier League football match between Queens Park Rangers and Chelsea on 23 October 2011."
She added: "After careful consideration of all the evidence, I am satisfied there is sufficient evidence for a realistic prospect of conviction and it is in the public interest to prosecute this case.
"Mr Terry will appear before West London Magistrates Court on 1 February 2012.
"He is now summonsed with a criminal offence and has the right to a fair trial. It is extremely important that nothing should be reported which could prejudice his trial."
After the allegation was made, Terry issued a statement saying he was "disappointed that people have leapt to the wrong conclusions about the context of what I was seen to be saying to Anton Ferdinand.
"I would never say such a thing, and I'm saddened that people would think so," he added.
Chelsea have been steadfast in support of Terry and ahead of the CPS decision, manager Andre Villas-Boas said Wednesday: "The only thing I know is that I will be fully supportive of John Terry, whatever the outcome.
"He has my full support, he has the club's full support.
"We know exactly his human values and personality. They are never in doubt."
The decision to press charges came a day before Chelsea, fourth in the table, travel to third-placed Tottenham for a highly anticipated London derby in which Terry is expected to play.
The CPS decision regarding Terry came a day after England's Football Association handed Liverpool striker Luis Suarez an eight game-ban for racially abusing Manchester United's Patrice Evra during a league match in October.
Source: PA
Source: PA