Hull has been named as the UK City of Culture 2017, beating Leicester, Swansea Bay and Dundee to the title.
The city will hope to see an economic boost from the accolade, which is handed out every four years.
Secretary of State for Culture, Media and Sport Maria Miller said: "This is brilliant news for Hull and everyone involved in the bid there.
"This year's UK City of Culture, Derry-Londonderry, demonstrates the huge benefits that the title brings. These include encouraging economic growth, inspiring social change and bringing communities together.
"It can produce a wonderful mix of inward investment and civic pride, and I hope Hull's plans will make the most of all that being UK City of Culture can bring."
Ms Miller praised the three losing cities for the "time, effort and determination" they put into their bids.
"I hope they will still take forward many of the fantastic ideas and events they had planned so that their communities can enjoy these innovative cultural plans," she said.
Referencing Hull band The Housemartins' first big hit, Happy Hour, former Deputy Prime Minister John Prescott , who was a Hull MP for almost 40 years, responded to the news on his Twitter page, writing: "It's Happy Hour again! #HullYes Well done."
TV producer Phil Redmond, who chaired the advisory panel that helped choose the winner, said all four shortlisted cities showed a "real understanding" of what the award was about.
But he said: "Ultimately it was the unanimous verdict of the panel that Hull put forward the most compelling case based on its theme as 'a city coming out of the shadows'.
"This is at the heart of their project and reminds both its people and the wider world of both its cultural past and future potential.
"We were particularly impressed with Hull's evidence of community and creative engagement, their links to the private sector and their focus on legacy, including a commitment to enhance funding beyond 2017, and I'd like to congratulate all involved."
Previous holders of the title have sought to improve the image of their city, holding various artistic and cultural events in an effort to increase visitor numbers and offer a boost to the local economy.
Hull's city council admits one of the aims of the bid is to "change the perceptions" of the city.
It is often derided - up until this year regularly featuring in the comic book Crap Towns - and last month an Economist article cited Hull as one of "Britain's Decaying Towns".
But the current city of culture, Londonderry, has seen visitor numbers double over the course of this year and had around £120m of capital investment pumped into the city since winning the title in 2009.
Its mayor, Councillor Martin Reilly, said: "I am confident that an amazing year awaits Hull as the winning city for 2017.
"I wish them every success and look forward to forming a working relationship with Hull to share our experiences and learning."
Leicester's mayor Sir Peter Soulsby said he was surprised and disappointed at the result.
"I can only guess that Hull desperately needed a shot in the arm while the judges decided we in Leicester are making our way successfully and didn’t need it as much," he said.
Meanwhile, Welsh Secretary David Jones said: "As much as today's announcement will come as disappointing news to those who have supported Swansea Bay's bid, they should be rightly proud of all that they have achieved."