Donald Nicholson, 93, initially thought he lost them on the way to the unveiling of a Bomber Command memorial in Lincoln, or at the event.
But the medals were handed in to his local police station in Tyne and Wear.
The former flight engineer, who flew 31 bombing missions, thanked police officers for returning his medals, adding he was "lost for words".
Asked about how he was feeling, he replied: "I'm on top of the bloody world."
He said: "It is unbelievable to think I dropped them outside my front door and they came back."
"I am really grateful to everybody who took part in the search."
He added: "It's marvellous to be reunited with them - they mean so much to me."
Mr Nicholson said he is looking forward to wearing the medals on Remembrance Sunday, and has promised not to lose them again.
He promised to "take more care in future".
The veteran said he must have dropped them when he was getting into a car as he left his home.
About 80 volunteers with metal detectors searched a field near the Bomber Command memorial on Friday afternoon after a week-long search.
But the search was called off after two hours, and everyone had given up hope of ever finding the medals when Mr Nicholson received a call from the police.
Staff at a Nottinghamshire service station also checked CCTV after Mr Nicholson thought he might have dropped them there.
A World War Two veteran has been reunited with a set of medals he thought he would never see again.