Mother Mary had founded the Sisters of St Joseph in 1866.
"At long last, Australia has a saint," News.com.au quoted Mary MacKillop Heritage Centre chief executive Garry McLean, as saying.
He added, "She was an extraordinary Australian, born here in Melbourne, and she has achieved what no other Australian has done.
"It's fantastic for the country to have its first saint and fantastic for Melbourne because she is a Melbourne girl."
Vatican officials made the announcement after the Pope confirmed that she had cured a woman from inoperable lung cancer who had been given just months to live in 1993.