Catholic bishop Dr Edward Daly and his Church of Ireland counterpart James Mehaffey were praised for their cross community leadership in the Troubles.
The two friends were honoured at a special ceremony on Tuesday.
Speaking at the ceremony, Dr Edward Daly said it was "a wonderful honour".
"I am hugely pleased to accept it particularly when it is being shared with my friend and brother, Bishop James," he told guests.
He said he had worked in the city since 1962.
"The past 53 years have been for me an incredible experience," he added.
"I greatly enjoyed the pastoral and cultural involvement of the early years of ministry here. I was shocked and terrified during the years of conflict; those years provided me with great challenges that I found daunting and, sometimes shocking; sometimes terrifying.
"For the last 21 years, I have served in the hospice - those years spent in that remarkable place have formed an edifying and life-enhancing experience and gave me a new sense of the precious and unique nature of every human life."
Mr Mehaffey said that he saw Dr Daly as a friend and that they had "a common outlook".
"We shared an awful lot for the good of the people," he added.
The city's mayor, SDLP councillor Brenda Stevenson, said the honour was in recognition of the great work both men had done "to promote peace and cross community partnerships over the past five decades".
Two retired Londonderry bishops who are also good friends have received the freedom of their city.