According to Heritage New Zealand, to be listedas a Category 1 site, historic places must "have special or outstanding historical or cultural significance or value".
The watchtower is a historic symbol of Whanganui's late-19th-century fire protection systems and the town's volunteer fire brigade.
Fire was a significant risk in early New Zealand towns and the fire watchtower is representative of the investment made to prevent loss from fire.
The six-metre-high octagonal watch tower has retained a high degree of authenticity, with the removal of the watch room's access stairs being the only major change to the structure.
Its late-Victorian design features and high proportion of original fabric have added to its aesthetic value.
Whanganui district councillor and trustee of the Whanganui Regional Heritage Trust, Helen Craig, was in charge of the application process.
Heritage New Zealand contacted the council six months ago regarding the status of the former fire watchtower, Craig said.
"There were a number of sites that Heritage New Zealand knew should be Category 1, but weren't. So they notified us and asked if we would front an application.
"We did so without hesitation," Craig said.
"They asked us to fast track it because they knew they could get it through quickly because it was not in dispute that it was a Category 1 site, it was just that their registration process hadn't been properly done a while ago."
The tower in Cooks Gardens replaced an old tower that was on Rutland Hill in 1891 after it had become unsafe and didn't give the watchman the sight coverage it needed due to the expanding town.
The bell from the Rutland Hill tower is believed to have been removed and mounted in the new tower.
Senior Station Officer Operational Support from Fire and Emergency New Zealand Brian Barkla said the structure is "quite significant".
"It was a way for brigades to send out an early warning, before telephones and alarms were around.
"A lot of towns had them but this is one of the last ones."
Heritage New Zealand believes this tower is the sole surviving example of a fire alarm and prevention structure in the country.
The Wanganui Volunteer Fire Brigade raised the funds necessary for the tower, with prominent local architect Alfred Atkins designing it for free. It was constructed by Thomas Battle, a local builder and member of the fire brigade between July and August in 1891.
The tower is symbolic of the time and technology available. It was used until 1922, when it was superseded by an electronic alarm system installed in the streets.
While the tower was no longer of use to the Fire Brigade, it would soon have a new function for the community. In 1933, It would be the new home of the clock chimes from the Whanganui Post Office clock tower.
After the destructive 1931 Hawke's Bay Earthquake provoked a nationwide response into building safety and practice, post office clock towers were removed around the country to reduce the risk to life if a similar event was to occur.
The addition of the Post Office's former bells would transform the watchtower into a civic time-keeping structure, with the music of the bells still valued today.
Having the tower listed to the highest available protection was vital, Craig said.
"It is incredibly important for New Zealand to recognise historic buildings of both Māori and European heritage.
"By upgrading this site to a Category 1, it will ensure its place in the city for hopefully another 100-plus years."
There will be an event commemorating the site in late February.