Thousands of people in Kish Square in Benghazi, Libya's second city, sang the national anthem and waved flags, both of which date back to the monarchy which Gaddafi overthrew in a 1969 coup.
Mustafa Abdel Jalil, the leader of the NTC, kneeled in prayer after taking the stand in the celebration on Sunday and promised to uphold Islamic law.
"We as a Muslim nation have taken Islamic sharia as the source of legislation, therefore any law that contradicts the principles of Islam is legally nullified," Jalil told the crowd.
The NTC leader thanked the Arab League, the United Nations, and the European Union for supporting the uprising which ended with Gaddafi's death on Thursday.
"All the martyrs, the civilians and the army had waited for this moment. But now they are in the best of places ... eternal heaven," he said, shaking hands with supporters.
"The revolution began as a peaceful one. But it was faced with violence," he told the tens of thousands of Libyans gathered in the city, where fighting against Gaddafi erupted in February.
An NTC official who opened the ceremony, said: "We declare to the whole world that we have liberated our beloved country, with its cities, villages, hill-tops, mountains, deserts and skies."
Abdul Hafiz Ghoga, the council's Vice Chairman, said at the ceremony that Libya would uphold all international agreements and treaties.
"The Libyan people, as they establish a state of law, firstly, assure the world of their respect for all Libya's signed agreements according to international standards," Ghoga said.
The NTC has said it will now embark on the process of building a democracy and hold the country's first free elections next year.
Source: Al Jazeera