He received the honour from Diaz Ayuso, the President of the Community of Madrid.
In his pre-tournament news conference in Toronto on Sunday, Nadal said a recurring foot issue he has been dealing with since 2005 returned at the French Open, where he fell to eventual champion Djokovic in the semi-finals.
Rafael Nadal dug deep to beat mercurial wildcard Nick Kyrgios 7-6(0), 5-7, 6-4 in a blockbuster quarter-final match that lived up to the hype at Indian Wells on Thursday.
Nadal said he did not expect to go all the way at Melbourne Park
Images from Day 3 of the 2023 Australian Open at Melbourne Park on Wednesday.
Alcaraz also found a surprising source of joy and mental training on the green: golf!
Daniil Medvedev will play Rafael Nadal for the Australian Open title on Sunday after a stirring victory over Greek fourth seed Stefanos Tsitsipas in the semi-final on Friday.
American Frances Tiafoe celebrated his 21st birthday by stunning Bulgaria's Grigor Dimitrov 7-5, 7-6(6), 6-7(1), 7-5 in the fourth round of the Australian Open on Sunday.
The two cases shocked the tennis world with many fuming at how they were handled by the authorities.
Nadal has traditionally started his French Open campaigns with at least one claycourt title under his belt but this year got to the French capital empty-handed.
The Spaniard, who turns 36 next week, will next meet Dutch 26th seed Botic van de Zandschulp with a potential quarter-final looming against world number one Novak Djokovic who defeated him in last year's semi-finals.
Alexander Zverev won the first set 7-6, but Novak Djokovic has been forced to withdraw from the match due to injury from the Australian Open semi-final on Friday.
Second seed Rafael Nadal said he would make no excuses after his shock loss to American Frances Tiafoe in the US Open fourth round Monday, despite a serious abdominal injury that derailed his run-up to the year's final major.
Sinner remains the man to beat at Melbourne Park even as doping officials seek a two-year ban for the world number one for failing two drugs tests last March.
Rafael Nadal returns to the US Open for the first time in three years short of match practice and with big question marks about his fitness but few people will dismiss the Spaniard's chances of claiming a record-extending 23rd Grand Slam title.
Images from the French Open quarter-final between Rafael Nadal and Novak Djokovic at Roland Garros on Tuesday.
Rafael Nadal is in contention for the 'World Sportsman of the Year' award alongside six-time Formula 1 World champion Lewis Hamilton, six-time World MotoGP champion Marc Mrquez and six-time FIFA World Footballer of the Year Lionel Messi.
Rafael Nadal confirmed he will miss this year's French Open as he is yet to recover from injury.
World number one Carlos Alcaraz sailed into the Paris Masters third round with a 6-4, 6-4 win over Yoshihito Nishioka but Rafael Nadal and Daniil Medvedev both slumped to surprise losses on Wednesday.
Images from Day 6 at the French Open, at Roland Garros, in Paris, on Friday.
Former world number one Andy Murray eased past Rafael Nadal in the Spaniard's comeback match at the World Tennis Championship exhibition tournament in Abu Dhabi on Friday.
Australian Open champion Rafa Nadal said he would love to finish his career with more Grand Slam titles than rivals Roger Federer and Novak Djokovic but thinks he will have to secure more than 21 to do so.
'What a heart, what a mindset, what guts, what everything, what a REFERENCE you are! I'm at your feet!'
Rafael Nadal shrugged off his derailed bid for the Grand Slam record with a pledge to keep "fighting" but the Spaniard leaves the Australian Open with familiar regrets after bowing out to a rising talent on Wednesday.
A couple of months ago, the 35-year-old Spaniard was worried that he might never return to the court again.
Alcaraz grinds down Zverev to win maiden French Open title
How Nadal surpassed the haul of Roger Federer and Novak Djokovic.
Rafael Nadal, who was out of competitive action for over six months due to the COVID-19 pandemic, was at pains to point out that not everything was as easy as it looks.
Next up for the 35-year-old will be another American in 39th-ranked Tommy Paul with a potential semi-final clash against top-seeded Russian Daniil Medvedev, who he defeated in the Australian Open final from a two-sets deficit.
A summary of Thursday's action at the US Open.
With world number four Ruud already assured of a semi-final berth the match was in reality a dead rubber.
The win put Nadal one clear of Federer and world number one Djokovic on the all-time Grand Slam titles race.
Defending champion Novak Djokovic and Rafael Nadal will clash for the Italian Open title after the top two seeds advanced to the final of the Masters tournament on Saturday.
Rafael Nadal will become the first man to win 21 Grand Slam titles if he defeats the Russian in Melbourne.
Rafael Nadal pulled off an incredible recovery from 1-5 and match-point down to overcome Russia's Daniil Medvedev at the ATP Finals.
Frances Tiafoe said his days of flying under the radar were over
Rafael Nadal said he was lucky to be part of an era of tennis that included Roger Federer and Novak Djokovic after the Spaniard won a men's record 21st Grand Slam title at the Australian Open to move one ahead of his two great rivals.
Rafael Nadal said he feels sorry for Novak Djokovic after the world number one was denied entry into Australia but added that the Serb knew for months he could potentially face problems if he arrived without being vaccinated against COVID-19.
Rafael Nadal said he still does not know when he will play tennis again as he works to complete his recovery from a recurring foot injury that cut short his 2021 season.
Factbox on Carlos Alcaraz, who beat Alexander Zverev