Mr Wilson, who died in August aged 57, will have his name etched on the roll of honour at Manchester Town Hall.
Freedom of the city has been awarded to 75 people and six military regiments and it is the first time a posthumous honour has been issued.
Councillors unanimously agreed to the gesture in recognition of the Salford-born entrepreneur.
The motion was proposed by the Lord Mayor of Manchester, Councillor Glyn Evans, in recognition of Mr Wilson's "outstanding contribution to the life, music and culture of the city over many years".
Under council rules, individuals have to be alive to be given freedom of the city so it was not possible to make Mr Wilson an honorary freeman, a spokeswoman said.
| | Tony Wilson promoted Manchester, its arts, and its culture across the world Glyn Evans Lord Mayor |
"But had Tony lived, he would almost certainly have been given freeman status so councillors agreed they would make an exception and his name will be placed alongside those who have been given the status," she said.
The last person to be given freedom of the city was Manchester United manager Sir Alex Ferguson, in 1999.
As well as being passionate about music, Mr Wilson was a life-long United supporter and his name will be inscribed alongside Sir Alex's.
Mr Wilson, the former broadcaster, record label boss and owner of the Hacienda nightclub, died on 10 August. He had been suffering from kidney cancer.
Musical 'inspiration'
His vision and determination played a key role in helping to put Manchester on the map for its music and vibrant nightlife.
He launched the iconic Manchester bands Joy Division, New Order and the Happy Mondays.
Mr Evans said: "Tony Wilson promoted Manchester, its arts, and its culture across the world.
"He was a big supporter of numerous arts and charitable organisations across Greater Manchester and was, of course, the inspiration to a generation of young musicians who put Manchester centre stage in the world of music.
"Equally important was the contribution he made to the political life of the city, in particular through the involvement of the creative sector in the process of renewal."
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