The east Belfast musician was honoured by the city council for his achievements during his long career.
He was presented with the honour at the Waterfront Hall, before performing a free concert. Tickets were drawn in a lottery system for Belfast residents.
Since the freedom of the city was first awarded in 1898, 54 men, 16 women and nine organisations have been honoured.
Among those in the audience was Morrison's mother, Violet, while his daughter Shana was part of his backing group.
Before the concert, he was presented with a scroll and a gold ceremonial key by Lord Mayor MÃ¡irtÃ­n Ã“ Muilleoir and his predecessor Gavin Robinson.
Morrison was brought up in east Belfast, and the inspiration for a number of songs came from local streets such as Cyprus Avenue and Hyndford Street.
His career began in the 1950s and he has enjoyed critical acclaim, winning six Grammy Awards, a Brit Award for outstanding contribution to music, and places in both the Rock 'n' Roll Hall of Fame and the Songwriters' Hall of Fame.
Van Morrison has become the 79th recipient of the freedom of Belfast on Friday.