Friends, family and dignitaries gathered at Western Gardens, where a plaque has been erected in memory of Mr Minghella who died in 2008.
At the unveiling, Jude Law paid tribute to Anthony, who he worked with on films including The Talented Mr Ripley and Cold Mountain.
Jude said: "Whenever people ask me to talk about Anthony, which is very often, I'm always flushed with emotion, for obvious reasons — I miss him terribly.
"I miss his friendship, I miss his guidance, I miss his inspiration, and I miss his love — he was terribly loving.
"It is so pleasing to know that there is now a place where everyone can come to remember and think about this beloved man, on his beloved Isle of Wight."
Such was his passion for the Island, that in his best director acceptance speech for the 1996 film The English Patient, Anthony Minghella he declared it 'a great for the Isle of Wight.'
At today's event Anthony's sister Gioia Minghella said: "We know that Anthony is an important part of the Island's heritage. He treasured the Island and the Island treasured him; he was particularly honoured to be made the first Freeman of the Isle of Wight.
"We are so pleased and touched that there is now this special place dedicated to him in Ryde, where he was born and raised.
We hope Islanders and visitors alike will come here to look out to sea, recall his work — the words, stunning images and music that he left us — and to remember him, as we will, always, with love in our hearts."
For a full interview with Jude Law, please see Friday's Isle of Wight County Press, March 4.
See Anthony's Oscar acceptance speech below: