Gibraltar was granted city status by Queen Victoria in 1842.
But the Rock was still omitted from the official list of recognised cities, research in the National Archives reveals.
The error has been formally addressed as ministers publish a fresh record of the 81 places that have so far achieved the special status.
The list includes the eight new designations awarded as part of a competition to celebrate the Queen’s Platinum Jubilee earlier this year.
Outgoing Prime Minister Boris Johnson said it was “excellent” to see the recognition for Gibraltar, describing it as a “huge accolade” to the Rock's “rich history and dynamism”.
Cabinet Office minister Kit Malthouse said: “The cities in this list are incredibly rich with history and culture, and the local people of those areas are rightly very proud to see their city’s significance put to paper.
“I’m hopeful people based in these places, particularly the new cities, can reap the benefits of their home’s increased global standing and that it will attract more inward investment for local businesses.”
The full list of recognised cities from the overseas territories include Hamilton, Bermuda; Jamestown, Saint Helena; and Stanley, Falkland Islands – the latter of which was among the eight places to win the status in the Platinum Jubilee contest.
Gibraltar
Simon Galloway
Prime Minister Boris Johnson
Peter Nicholls