Liverpool emerged a cultural winner - despite the fact its residents were "less cultural" than in other rival cities.
Liverpool was unsure it would emerge as the winner
On Wednesday Culture Secretary Tessa Jowell announced Liverpool had won the European Capital of Culture for 2008.
That follows a survey which revealed that Liverpudlians enjoyed "less cultural pursuits" than the likes of Oxford, another culture contender.
Eddie Berg, a director of arts in the city, said the win is the "most significant thing to have possibly happened to Liverpool".
Professor Michael Parkinson of Liverpool John Moores University told BBC North West Today: "I think Liverpool has come in from the cold. We've won this national [victory].
"After all the terrible times we're back and we've won."
Liverpool is now expected to benefit from £2bn of investment over the next five years.
Employment in the culture sector - tourism, sport, heritage and the creative industries - is expected to be boosted by the creation of up to 14,000 jobs.
Nearly 2m extra visitors a year could also boost spending in the city by more than £50m.
Mr Berg - director of FACT the city's new £10m arts centre - said in less than a day there has been a "seismic change" in the way people look at the city.
Culture celebrations will come after the city's 800th birthday in 2007
He said: "This is probably the most important day for Liverpool in my lifetime.
"It's tangible in the streets, there are people walking round with huge grins on their faces."
Chris Brown, of the Mersey Partnership, which promotes investment in the region, said people will feel compelled to visit now.
He said: "People will now look at the city and the region of Merseyside, and say 'They've got something I want, they've won something, I want to go and see what it can offer to me."
Sir Jeremy Isaacs, chair of the culture bid judges, stressed the winning city would also need to be investing in the lives of its people to secure victory.
During the panel's last visit in April, he told BBC Radio Merseyside, on: "We're looking for a city that...is using [culture] to have an impact on the lives of its citizens by being a tool of social and economic regeneration."
Events over the next five years will show whether Liverpool can live up to the promises it has made.