The Sydney-born media icon was named Australian of the Year at a ceremony in front of Parliament House on Friday evening, while her two children, Kate and Ben Macdonald, and a crowd of thousands watched.

The ACT's finalists were unsuccessful in all four categories - Australian of the Year, Young Australian of the Year, Senior Australian of the Year, and Local Hero - this time around.

Buttrose said she was deeply honoured, describing the award as the proudest moment of her life.

She will use the next year to champion the rights of ageing Australians, in much the same way she battled prejudice against women throughout her groundbreaking career.

''A lot of older people feel they don't have a voice, they don't have an opinion, they're not respected, they're invisible,'' she said. ''Just because you're old, it doesn't mean that you are not a person, and you must be able to be in charge of your own life, as long as you are able.''

She said boosting dementia research, and tackling the stigmas and stereotypes surrounding dementia sufferers, would be a key focus for her tenure as Australian of the Year.

''There is much to be done, but nothing is impossible.

''If, during my year, I can contribute to achieving a more positive attitude to ageing, deliver on Alzheimer's Australia's Fight Dementia campaign, and put the spotlight on medical research, I will feel I have in some small way lived up to the honour that has been given to me today.''

Buttrose started her extraordinary and inspiring career in the media industry as a 15-year-old copy girl at The Australian Women's Weekly.

In a career spanning several decades, she worked as a journalist at The Daily Telegraph, created the highly successful Cleo magazine in 1971, became the editor of Women's Weekly three years later, and returned to the Telegraph in 1980 as the first female editor of an Australian metropolitan newspaper. She also worked as editor of The Sunday Telegraph, and in 1981 became the first woman to be appointed to the News Limited board.

Buttrose was chosen from a field of prominent state and territory finalists, including businessman Kerry Stokes, cancer researcher Professor Adele Green, advertising guru Harold Mitchell, cyber safety campaigner Sonya Ryan, adventure teacher Andrew Hughes, and indigenous talent mentors Mark Grose and Michael Hohnen.

Afghan refugee Akram Azimi, who works with young indigenous Australians in remote Western Australia, was named the Young Australian of the Year, while indigenous community leader Shane Phillips won the Local Hero award for his youth work in Sydney's Redfern.

Palliative care specialist and campaigner Emeritus Professor Ian Maddocks was named Senior Australian of the Year.

The ACT Australian of the Year, social justice campaigner Tom Calma, was recognised for his ''inspirational and inclusive'' advocacy for human rights, social justice, and empowerment, particularly for indigenous Australians. But Dr Calma, who was instrumental in setting the groundwork for the Close the Gap campaign, narrowly missed out on being named Australian of the Year.

The ACT's Senior Australian of the Year, Jim Peacock, had been recognised for his work with the CSIRO as former chief scientist and as an agricultural scientist, particularly his research in gene technology.

Women's advocate and UN Women Australia executive director Julie McKay, named ACT Young Australian of the Year, missed out on the national award.

Francis Owusu, who was the ACT's finalist for Australia's Local Hero, was recognised for his work with Kulture Break, teaching dance to young people to foster a positive culture, a sense of belonging, and stronger self-esteem. He will be the subject of a film celebrating some of the finalists.