The elegant strawberry blonde was appointed a "Companion in the General Division of the Order of Australia (AC)" at a ceremony at Government House in Canberra.
With country-crooner husband Keith Urban, a fellow Australian, at her side, Kidman ditched red-carpet glamour for a demure pink frock to receive her award from Governor-General Michael Jeffery.
She was given the honour for her contribution to the arts and her charity work.
"I think the great thing about you, Ms. Kidman, is what have you have done to better the human condition," the governor-general said.
"You have become become an honorary ambassador to UNICEF and UNIFEM (the United Nations Development Fund for Women), you're looking after children and women's issues.
"You've been a great support for children at Sydney hospital and a great supporter of research for cancer.
"Not only are you a tremendous actress but you are a great attribute to the nation."
With her parents Janelle and Antony in the audience, Kidman said they would be more proud than when she won an Oscar for portraying Virginia Woolf in "The Hours."
"It's a pat on the back, which as a little girl is something I think you dream of," she said.
Kidman was named a granted the honour last year but international commitments prevented her from travelling to Australia to receive the award in person.
She is now back in her home country to film a Baz Lurhmann movie "Australia," and took a break from preparations to fly to Canberra for the ceremony.
The Hollywood beauty, known here as "our Nic," lined up with other recipients for her Australia Day honour, having turned down the offer of a private investiture.