May was joined by fellow music veterans Tony Iommi, Suzi Quatro, Neil Murray, and Bernie Marsden for the celebration, which took place outside the town centre's Corn Hall, where the commemorative plaque was placed.
Paying tribute to Powell, who also performed with Black Sabbath, Whitesnake and The Jeff Beck Group, May told the hundreds who had gathered for the event, "Thanks for being here. It's a very happy occasion.
"He was a son of Cirencester and he was a brilliant, innovative, world-beating drummer. He was one of the world's greatest drummers and musicians. We have the great honour of unveiling this."
The tragic rocker, real name Colin Powell, was killed in a car crash in England in 1998, aged 50.
Officials at the Cirencester Civic Society granted Powell the blue plaque honour - the town's first to commemorate a person - after a fan petition won the backing of 3,500 locals.