Afterwards, Prince William met privately with some of the bereaved families and left a handwritten message on a Tree of Hope.
Robby Potter, who was hit by shrapnel as he waited to pick his daughter up from the concert, said he felt he had to come to the service "to support the families who have lost people".
Singer Ariana Grande is overcome by emotion at the One Love Manchester tribute concert on June 4, 2017.
The service, attended by first responders, civic leaders and some of the scores injured in the bombing, led the minute of silence at 2.30pm (2330 AEST), which was also marked at British government buildings nationwide.
Later, thousands of people - including a choir of attack survivors - gathered for a concert and sing-song in the city's Albert Square.
"I love you with all of me and am sending you all of the light and warmth I have to offer on this challenging day", she wrote. The fans were victims of a terrorist who detonated a bomb in the foyer of the venue as concertgoers filed out of the arena after Ariana's gig.
"It was created to strike at the heart of our values and our way of life in one of our most vibrant cities, with the aim of breaking our resolve and dividing us".
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"I stood out in St Ann's Square, with my arms out and a cardboard sign that said 'I'm a Muslim, I trust you".
With his wife and father looking on, he paid tribute to the "amazing work" of the emergency services and those who responded on the night.
"We were very lucky, we know how lucky we are", he told Sky News.
A Muslim man's "act of kindness" following the Manchester terror attack a year ago has been recognised in a series of art displays around the city.
Bells were scheduled to ring out from the town hall at 10.31pm, marking the moment the attack took place.
Some laid bouquets of flowers in St. Ann's Square.