The squad will leave for the 10-match tour, which includes Tests in Durban, Pretoria and Johannesburg, on 24 May - a day after the Heineken Cup final.
Ulster flanker Ferris described his selection as the "pinnacle of rugby".
"It hasn't really sunk in yet and I don't think it will for a few days," said Ferris, who was informed of the good news after Ulster training on Tuesday.
"I was out here training my guts out for a couple of hours and after I had a shower, I was kicking a ball about when our fitness coach Jonny Davis came out and gave me the thumbs up."
Ireland's skipper O'Driscoll was the other contender for the captaincy.
O'Connell described his selection as skipper as a "fabulous honour".
"This was never something I aspired to do but to be selected is a great honour," said the Munster and Ireland lock.
"I looked at the squad last night and it will be a privilege to lead them.
"Brian (O'Driscoll) gave me a ring the other day after we had spoken to Ian and was great about it.
Paul is a very special character
Lions coach Ian McGeechan
"The main thing will be leaning on the experience of the coaches and leaders within the squad.
"It needs to be a big squad effort. That will be the secret to any success. The more people who have input the better."
O'Connell won three Lions caps against New Zealand in 2005 and was one of only two tourists to play in every minute of each Test, except for a spell in the sin-bin.
Since making a try-scoring debut against Wales in 2002 he has amassed 62 caps and become one of the northern hemisphere's most respected players.
He emulates England second row great Martin Johnson in leading the Lions despite not being national skipper at the time.
McGeechan said: "Paul has proved himself with Munster and Ireland.
"He drives a forward pack with his character and it was important to have that focus in the forwards.
"We need that impetus up front and Paul is a very special character."
No player other than the captain had been informed of his selection in advance, so leading candidates from the four home nations had an anxious wait before McGeechan finalised the tour party.
The Wasps director of rugby, who has been on three Lions trips as head coach (1989, 1993, 1997) and was the midweek coach four yeas ago, was understood to have decided on 30 of his squad ahead of last weekend, before inking in the final names.
British and Irish Lions squad
Lee Byrne (Wales), Rob Kearney (Ireland), Shane Williams (Wales), Leigh Halfpenny (Wales), Ugo Monye (England), Luke Fitzgerald (Ireland), Tommy Bowe (Ireland), Tom Shanklin (Wales), Jamie Roberts (Wales), Brian O'Driscoll (Ireland), Keith Earls (Ireland), Riki Flutey (England), Ronan O'Gara (Ireland), Stephen Jones (Wales), Mike Phillips (Wales), Harry Ellis (England), Tomas O'Leary (Ireland).
Jamie Heaslip (Ireland), Andy Powell (Wales), David Wallace (Ireland), Stephen Ferris (Ireland), Alan Quinlan (Ireland), Joe Worsley (England), Martyn Williams (Wales), Alun Wyn Jones (Wales), Paul O'Connell (Ireland) (captain), Donncha O'Callaghan (Ireland), Simon Shaw (England), Nathan Hines (Scotland), Gethin Jenkins (Wales), Adam Jones (Wales), Andrew Sheridan (England), Phil Vickery (England), Euan Murray (Scotland), Jerry Flannery (Ireland), Lee Mears (England), Matthew Rees (Wales).
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.