The three-time Oscar winner, who was named during the Queen's Birthday Honour's List in June, received the prestigious accolade and his new title during a ceremony at Buckingham Palace in London in recognition of his services to drama.
The 'Lincoln' star declined to comment after the festivities, but previously said he was ''entirely amazed and utterly delighted in equal measure'' after being informed he would be bestowed with the honour.
He smiled graciously as he got down on bended knee and the Duke of Cambridge placed a sword on his shoulders at the event, during which a number of other people were also honoured.
The 57-year-old actor, grew up in London, but lives on a remote farm in Annamoe, Co. Wicklow in Ireland and holds dual citizenship.
Daniel, who has two sons, Ronan, 16, and Cashel, 12, with wife Rebecca Miller and son Gabriel, 19, from a previous relationship with French actress Isabelle Adjani, won his first Oscar for his role as disabled writer Christy Brown in the 1989 drama 'My Left Foot.'
He was also awarded the Best Actor trophy for his roles in 'There Will Be Blood' in 2007 and 'Lincoln' in 2012.
Earlier this year, Oscar-winner Angelina Jolie was made an honourary dame by the Queen for her humanitarian work.
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