Perth became Scotland's seventh city as it was awarded the status to mark the Queen's Diamond Jubilee.
It joins Edinburgh, Glasgow, Aberdeen, Dundee, Inverness and Stirling as cities. St Asaph in Wales and Chelmsford in England were also awarded city status while Armagh in Northern Ireland was granted a lord mayoralty.
Perth was selected following a competition to bid for the civic honour which 26 towns across the UK entered.
Civic leaders and politicians welcomed the announcement, which they believe will boost Perth's profile. Dr John Hulbert, provost of Perth & Kinross Council, said: "I am delighted that official city status has been restored to Perth. Everyone in the council shares my excitement at the prospect of a glorious new chapter in Perth's long history.
"The City and Royal Burgh of Perth was the capital of Scotland from the 9th century until 1437, and then officially the second city of Scotland until 1975. Even although city status was summarily removed when local government was reorganised, Perth has continued to be known as the 'Fair City'. Full restoration of its ancient dignity is long overdue.
"This decision reflects the fact that Perth is at the forefront of Scottish life: a modern, dynamic, international city, offering unrivalled business, artistic, educational, cultural and sporting opportunities to its citizens and visitors."
Perth based its application on its history as Scotland's first capital and later as the country's second city after Edinburgh. It is first referred to as a city in a "Golden Charter", ratified by King James VI in Perth in 1600.
In its 52-page application, it also cited its "ambition to become a dynamic, international city" and its determination to be a "vibrant and successful regional centre" for Perth and Kinross.
Perth celebrated its 800th anniversary as a Royal Burgh in 2010. It was considered a city until 1975 when the status was removed as part of a local government shake-up.
First Minister Alex Salmond said: "This is fantastic news for the city of Perth and indeed for the whole of Scotland. To have the title of city restored rightly to this ancient capital is entirely fitting during this diamond jubilee year."