Captain Ricky Ponting raised the huge cup to the cheering crowd at the outdoor ceremony in Martin Place, but the biggest cheers of the day were for fast bowler Glen McGrath and coach John Buchanan, who have both retired.
McGrath was man of the series in the Caribbean as the Australians trounced the rest of the world for the third successive time, while Buchanan was described by Ponting as the best coach he had ever worked under.
Prime Minister John Howard, a self-confessed 'cricket tragic', earlier hailed Ponting for "great leadership" and his team for a "stunning performance."
Premier Morris Iemma of New South Wales state, of which Sydney is the capital, later hosted the team at the civic reception, where they were each presented with a gold commemorative ring.
At a news conference earlier Ponting shrugged off the farcical end to the tournament, when officials ordered Sri Lanka to bat on in darkness for three overs after the players had believed the game to be over.
"It sounded a whole lot better to us to get those three overs out of the way that night than come back the next morning, I'd have been struggling to find someone to bowl the three overs the next morning," Ponting said.
But, asked about the role of the officials, he made it clear that the confusion had not gone down well at the time.
"I think they've learned their lessons there and I'm sure next time they officiate in big games like that they'll know the rules inside out."
Ponting joked about the days of celebration by the team in the Caribbean since the final, saying that even after the flight home he was "more refreshed than I was two days ago that is for sure.
"The celebrations were long and hard which is what they should be after you win a World Cup.
"There were some pretty amazing scenes coming back to Australia from guys (with) not a lot of clothing on at different hours of the morning, but we
celebrated as we should."
Ponting said Australia's second straight undefeated run at a World Cup was an amazing achievement and praised Adam Gilchrist for his man of the match performance in the final.
"For us to again go through undefeated and once again have a lot of our players peaking at the right time in the World Cup is an amazing achievement by everybody," he said.
"Gilly's innings in the final as I have been flat out telling him, it was unbelievable, that was the one difference between the two teams in the final.
"It has been an amazing couple of months of our lives and even more amazing last few days."
At the breakfast, Howard praised outgoing paceman McGrath as one of the all-time greats.
"The wonderful Glenn McGrath ... really has been an ornament to Australian cricket for many years," he said.
"He is the greatest fast bowler of his generation and many would say he ranks with the very greatest that the game has seen."

Copyright AFP (Agence France-Presse), 2007