Drake thanked Toronto for being "unconditionally supportive" and "unconditionally loving" as he received the key to the city on Friday.
"This is probably one of the biggest moments of my life — if not the biggest moment of my life," the hometown rapper said as he accepted the honour before the NBA All-Star Celebrity Game.
Drake was the Canadian team coach for the star-packed game that kicks off a weekend of NBA all-star festivities.
Organizers said that Drake will also "be adding his own special touch" to the NBA All-Star player introductions on Sunday.
Clad in a suit beside Mayor John Tory at centre court, the 29-year-old, whose real name is Aubrey Graham, called the city "a cultural mosaic" that has taught him "so much about life."
"With this amazing honour ... I feel like I have a new purpose, a new goal."
That goal is to encourage youth to "unify, take pride in the city," he said, noting he wants to make it a "peaceful, incredible place."
"I will never stop loving this city, I will never stop representing this everywhere I go," he added.
The key was gold in colour and presented in a box that had Drake's name engraved inside.
Asked on the red carpet how much the key was worth, Tory would only say, "It's priceless," adding: "I'm sure it's not gold."
The Canadian team at Friday's game included tennis stars Eugenie Bouchard and Milos Raonic, actor Tom Cavanagh and Arcade Fire lead vocalist Win Butler.
"It's a nice opportunity for Toronto to host and showcase Canada basketball and basketball in general, the level at which it's grown here in the country," said former NBA player Rick Fox, a Toronto native who was also on the Canadian team Friday.
"To be the first international city chosen by the NBA (for the All-Star event) is an honour, it's history and I know it's going to be a smashing success.
"It may be cold outside but Toronto will heat it up."
Bouchard said basketball is her favourite sport after tennis.
"I've done basketball camps when I was 12," she said on the red carpet before the game. "Every summer I did basketball camps when I was young.
"I'm hoping these basic fundamentals will help me through tonight and I still have something from those camps."
The American team, co-coached by actor Kevin Hart, included actors Jason Sudeikis, Anthony Anderson and TV personality Nick Cannon.
"I'm tall in personality and I'm tall in confidence," the five-foot-four Hart said on the red carpet.
Drake is up for five Grammy Awards on Monday, including best rap album for If You're Reading This It's Too Late. In April, he's set to drop his highly anticipated new album,Views From the 6.