The boroughs of Brooklyn, Queens and Staten Island are now eligible for Federal assistance to help recover from the damage.
"This is certainly welcomed news for New York City and removes a tremendous financial burden," Governor David Paterson said.
The Federal declaration provides 75 percent reimbursement to the three boroughs for the costs of response, debris removal and repairs to public property.
A preliminary damage assessment conducted by Federal, State and local inspectors estimated damage and cleanup costs at more than $27 million.
The Federal Emergency Management Agency (FEMA) has not yet acted on the Governor's request for Individual Assistance program relief for homeowners, renters and businesses in the boroughs of Brooklyn, Queens and Staten Island.
FEMA said additional designations may be made at a later date after further evaluation.