performance on the glittering harbourfront, where three generations of Danish architect Jorn Utzon's family were the guests of honour.
It was a postcard-perfect day beneath the same cloudless blue skies that inspired Utzon's winning design to build Sydney an opera house back in 1956 - the white sails drawn from his childhood in the Aalborg shipyards.
Aboriginal dancers perform a smoking ceremony on the steps of the Sydney Opera House on its 40th birthday. (AFP Photo)
"A building like this happens once in a lifetime," Utzon's son Jan told revellers on Sunday.
"It is a unique Australian expression of will and enthusiasm and 'let's go do it' kind of spirit."
A giant birthday cup cake is displayed on the steps of the Sydney Opera House on its 40th birthday. (AFP Photo)
A crew of surf lifesavers wearing their famous yellow-and-red caps and costumes arrived at the Opera House's Man O' War steps on one of Sydney's distinctive ferries, flanked by six of the association's dinghies and two tugboats.
They were met and led up the red-carpeted steps by Aboriginal dancers where a traditional smoking ceremony was held to spiritually cleanse the site accompanied by an indigenous dance ritual and didgeridoo.
A giant cupcake topped with a model of the Opera House made from icing was carried onto the stage by the lifesavers, and Australian rocker Jimmy Barnes - frontman of Cold Chisel - led a rousing chorus of Happy Birthday accompanied by a navy brass band and school choir.
An Airbus A340 made a low pass over the site to cap celebrations.
The distinctive performance hall is one of Australia's best-known landmarks and centrepiece of Sydney's cultural scene, hosting some 2,000 shows every year and attracting 8.2 million visitors.
Australian celebrity chef Matt Moran cuts pieces of a giant cake of the Sydney Opera House at its 40th birthday bash. (AFP Photo)
"As the most internationally recognisable symbol of both Sydney and Australia, it has become our calling card to the world," said Governor of New South Wales, Marie Bashir.
Opera House chief Louise Herron said the huge crowds were a reminder "that the Opera House is, above all, the people's palace."
Utzon won an international design contest to build the harbour city an opera house in 1956 that attracted 233 entries from 28 countries, despite being relatively unknown in the architecture world.
His ambitious blueprint, drafted from photos and maps without ever having visited the harbour site, took 14 years and Aus $ 102 million to complete, funded by a state lottery.