Details of what was picked out by the judges include the city's University of the First Age project, developed with the private sector to support secondary education, and the council's consultation process which managed to involve Birmingham's residents in deciding how to use the council's£1.32bn budget.
Theresa Stewart, leader of the council, said: 'This is a real accolade for the people of Birmingham. I am delighted that an independent body has recognised Birmingham's achievements and that we have won the most prestigious award possible.'
Chief executive Michael Lyons said: 'This is a large and complex authority whose work touches most parts of life in the city. We have made great efforts to improve our performance and become more sensitive to the different needs and aspirations of Birmingham.
He added: 'This all reflected in the fact that we are increasingly looked to as an example of good practice in local government. We have every reason to be proud of our success.'