The artist/singer was presented with the award by the region's Mayor Jon Gnarr at a special ceremony in the city on what would have been Lennon's 73rd birthday on Wednesday (09Oct13).
After receiving the award, Ono said, "Thank you for making me an honorary citizen of Reykjavik. It is indeed a great honour. It gives me an immense encouragement to continue doing good work.
"John and I believed in 'Nutopia', which would make all of us citizens of the world. But inside the world, there is a land of our hearts that is shining with warmth, truth and beauty called Iceland. Each time I visit the land, I am reminded of what is essential and therefore most important in life. Thank you, thank you, thank you for being you."
Ono made Reykjavik the centre of her world peace campaign after launching the Imagine Peace Tower memorial in the city in 2007.
Gnarr says, "With her outstanding work, Yoko Ono has pointed the light of peace to Reykjavík. It is therefore a great honour to award her with the title honorary citizen of Reykjavík.
"Yoko's contribution to peace and human rights issues in the world is unique. Imagine Peace Tower has been immensely valuable for Reykjavík... We have the wish that the city be permanently lit as a city of peace and human rights."