Stirling Castle is indicative of the city's history
The new city beat off competition from Ayr, Paisley and Dumfries, in Scotland, to be one of the towns across the UK to be recognised.
The Lord Chancellor's Department made the announcement on Thursday signalling the start of celebrations in Stirling, Preston in England, Newport in Wales, and Lisburn and Newry in Northern Ireland.
Provost Tommy Brookes said: "Stirling was the town that always thought it was a city - now the whole of Britain knows it is a city.
"This is a very special day and one that marks a watershed in the development of the whole area."
The provost said he believed city status would trigger renewed interest in Stirling and that it could have beneficial economic spin-offs.
Marketing strategy
The council would work with public and private bodies to develop a marketing strategy to take full advantage of the new status.
"Stirling's history, its position at the heart of Scotland, as a university town and as a location for national and international events and businesses make it an outstanding Golden Jubilee City."
Lord Chancellor, Lord Irvine of Lairg, who made the announcement, said: "It was an extremely difficult competition to judge because all the towns in their own ways were exceptional.
"They all demonstrated a very positive attitude to Her Majesty's Jubilee.
"These honours are sparingly bestowed as a mark of special distinction and the accolades were richly deserved by the winners."
'Forward-looking'
Entries came from 26 towns in England, six in Wales, four in Scotland and six in Northern Ireland.
Councils working on their applications were told three main factors would be taken into account: notable features, including regional or national significance, historical and Royal features and a "forward-looking attitude".
Lord Irvine said the Queen made her decision after taking advice from ministers.
City status carries no special powers for the winners but it is deemed such an honour that only 17 were made during the 20th century.
Brighton and Hove, Inverness and Wolverhampton were the last towns to be granted city status when the award was made to mark the Millennium.