The Lord Mayor Robert Doyle presented Singh with a certificate of commendation, the Herald Sun reported Wednesday.
Singh said the seven men and two women, whom he had picked up from Chinatown in his maxi cab, seemed very drunk.
"When I saw all that money, I thought, what is happening, it is something amazing, what should I do," Singh said.
After finding the cash, he drove to a police station but he soon received a call from the owners to return the money at the casino where he left them.
Singh believed they were visitors from China staying at the casino.
"They gave me a A$500 reward. One of them said: 'You're very honest, you're a very good man, you've helped us a lot'," Singh said.
"He is truly an inspirational Melbournian - it was the act of an honest man of integrity," Mayor Doyle said.
Singh said he was greatly honoured by the award.