The church congregation returned to St John's last month after more than a year holding services at its sister church of St Andrew's in Short Street.
The church's bells rang out on Sunday afternoon as guests assembled for the rededication of the landmark building which was first erected as part of the nation's celebrations for victory at the Battle of Waterloo and was later renewed as the Festival of Britain church in the aftermath of wartime damage.
In the introduction to his sermon, Archbishop Welby congratulated Eric Parry Architects for their work on the project. He said: "It is an amazing feat to have done this in a way that preserves its original heritage and yet feels fresh and 21st century. What an extraordinary achievement!
"Thank you for the refurbishment of the crypt so that there is space for arts and community and wellbeing and youth and exhibitions.
"Thank you for the fact that there is now a permanent base in the crypt to develop therapeutic arts, employment training and community organisations."
The Archbishop also praised all those involved in the project for the emphasis placed on environmental sustainability, including the installation of solar panels on the church roof.
Lambeth Council leader Cllr Claire Holland told the congregation: "I'm really grateful for all the money you have raised and all the volunteering that you do to serve this community."
She added: "I think that the way that this church has been renovated is a great example of how when we all come together – whether we're from this church or partners of this church – we can do great things and transform our communities."
Many tributes were paid to the vicar, Canon Giles Goddard, who with many volunteers including local resident David Clarson, has led the project over the past 12 years.
Music at the service included many items chosen for connections with St John's, including a hymn tune by Samuel Sebastian Wesley who was once the church's organist and an anthem by Felix Mendelssohn who is known to have played the organ at St John's during visits to London.
The King was represented at the service by Christopher Wellbelove, deputy lieutenant for Lambeth.
The grandson of Hans Feibusch, who painted the mural above the altar as part of the post-war renewal of the church, was also present at the service.