Dave Brailsford, who lives in Ilkeston, has been honoured after helping to guide Team GB riders to eight gold medals.
His role in Bradley Wiggins's Tour de France win has also been recognised.
The coach was presented with a framed scroll and a badge of office medal by the Mayor of Erewash borough.
Erewash Borough Council has only ever presented the award once, to the Mercian Regiment in 2007.
The ceremony, held at West Park Leisure Centre, Long Eaton, was attended by Mr Brailsford's family and representatives of local cycling clubs.
Speaking before the ceremony Mr Brailsford said: "It's nice to have your local community get behind you, it's always nice to come home... It's been a remarkable year, I'm pinching myself still.
"To have a velodrome in Derby will be absolutely fantastic.  Hopefully I can get everything moved there so I can just nip down the road to work, rather than having to travel."
Councillor Chris Corbett, the council leader, said: "It's a very proud moment for both this borough and for Dave.
"We salute his incredible achievements and honour a man who has been such an inspiration to so many people - and who will continue to be so."
Mr Brailsford was judged top coach at the BBC Sports Personality of the Year awards on Sunday.
Team GB's cycling director has received the freedom of a Derbyshire borough in recognition of his achievements at London 2012.