Sydney Archbishop Cardinal George Pell was joined by hundreds of school children and parliamentarians, including Prime Minister Kevin Rudd and Opposition Leader Brendan Nelson, in welcoming the 3.8m cross into parliament on Monday.
Cardinal Pell says World Youth Day (WYD) - to be held in Sydney between July 15 and 20 - will be a "momentous and uplifting" event in the history of Australia.
"The WYD cross and icon have visited parliaments around the world and their visit here is a reason to reflect," Cardinal Pell said in parliament's Great Hall.
"It is a moment to pray for justice, peace and equality in our country and a moment to acknowledge prayerfully those times in our history when the cross has not been faithfully borne by those who profess to follow Christ."
The cross and icon have visited parts of the world coinciding with historic events - it was in Europe in 1985 before the fall of the Berlin Wall and Ground Zero in New York City in 2002.
"The icon and cross has reached another significant historic moment here," Cardinal Pell said in reference to last week's parliamentary apology to the stolen generations.
Mr Rudd was greeted by cheers and loud clapping before he spoke on the significance of the event.
He said Australia was "honoured" to have Pope Benedict XVI visit this year for WYD, marking his first visit to the country.
The 40 kilogram wooden cross was carried into the Great Hall by eight adult and teenage pallbearers, followed by four people carrying the 15 kilogram icon.
The cross and icon have spent the past seven months travelling around Australia in the lead-up to the WYD event, accompanied by an indigenous message stick.
The message stick is an invitation to Aboriginal Australians to attend WYD from the indigenous people of Sydney - the Eora Gadigal people.
The ceremony included a Welcome to Country by Aunty Agnes Shea, a local Ngunnawal elder.
WYD was established by Pope John Paul II in 1986 as an annual event to reach out to the youth of the world.
The Sydney event is expected to attract 500,000 people.
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