Oxford Dictionaries Online said the word, borrowed from hip hop culture, had become increasingly visible in the past 12 months.
Other words such as omnishambles and selfie also made their debut in the dictionary's quarterly online update.
Omnishambles was named word of the year by the Oxford Dictionary in 2012.
The word - meaning a situation which is shambolic from every possible angle - was coined in 2009 by the writers of BBC political satire The Thick of It.
Katherine Connor Martin from Oxford Dictionaries said the word twerk had been known colloquially in US hip hop culture for around 20 years.
"By last year, it had generated enough currency to be added to our new words watch list, and by this spring, we had enough evidence of usage frequency in a breadth of sources to consider adding it to our dictionaries of current English," she said.
Other words added to Oxford Dictionaries Online
"There are many theories about the origin of this word, and since it arose in oral use, we may never know the answer for sure.
"The current public reaction to twerking is reminiscent in some ways of how the twisting craze was regarded in the early 1960s, when it was first popularised by Chubby Checker's song, The Twist," she added.
Cyrus's dance routine at the MTV VMA's on Sunday saw her dance suggestively with singer Robin Thicke to his hit song, Blurred Lines.
The performance drew complaints from several quarters, including a parenting pressure group in the US.
On average around 1000 new entries are added to Oxford Dictionaries Online every year.
Twerking, the raunchy dance move performed by Miley Cyrus at the MTV VMAs is among the new words added to the Oxford Dictionary of English.