The cyclist, who is known affectionately by fans as 'Wiggo' and renowned for his modesty, said that he "never saw myself as a Sir" and "probably never will".
"It's the ultimate accolade as a sportsman, being knighted not only the success this year but 12 years of consistent work - four Olympic Games, seven medals."
Wiggins heads a sparkling list of UK sporting heroes, including sailor Ben Ainslie, who gets a knighthood, para-cyclist Sarah Storey, who is made a dame, and Jessica Ennis, Victoria Pendleton, Mo Farah and David Weir, who all get CBEs.
The sporting stars who achieved so much at London 2012 meant an extended honours list this year. There was also recognition for those behind the Games: London 2012 chief Sebastian Coe becomes a Companion of Honour.
Wiggins's knighthood is undoubtedly the icing on the cake in a year which saw him win the Tour de France, take Olympic gold and then be crowned BBC Sports Personality of the Year.
A knighthood also went to Ainslie, the most decorated sailor in Olympic history, with four gold medals at four consecutive Games.
CBEs go to some of UK sport's biggest household names – rower Katherine Grainger, heptathlete and London 2012 poster girl Ennis, cyclist Pendleton, wheelchair athlete Weir, and Farah, who captured the UK's heart with his double gold in the 5,000m and 10,000m.
The honours also recognise those who contributed to London 2012 in a "non-sporting capacity", although opening ceremony creator Danny Boyle is missing amid speculation he turned down an honour.
Tony Blair's wife Cherie was given a CBE for her service to women's issues and to charit, and actor Ewan McGregor and fashion designer Stella McCartney got OBEs.