WASHINGTON - US President Barack Obama on Thursday honored outgoing Defense Secretary Robert Gates' four decades of service, including the past four-and-a-half years in charge of the Pentagon, by surprising him with the Presidential Medal of Freedom. It is the highest US honor a president can give a civilian.

Retiring US Defense Secretary Robert Gates acknowledges applause as US President Barack Obama and Chairman of the Joint Chiefs of Staff Admiral Mike Mullen (obscured) participate in Gates' farewell ceremony at the Pentagon near Washington, June 30, 2011. Gates will be replaced by former CIA Director Leon Panetta. [Photo/Agencies]

"I can think of no better way to express the gratitude of the nation to Bob Gates than with a very special recognition," Obama said as he asked Gates to step forward to receive the award.

An emotional Gates quipped that he "should have known the president was getting pretty good at this covert ops stuff," an apparent reference to last month's secret raid in Pakistan that killed terrorist leader Osama bin Laden.

Gates said his tenure as defense secretary, a period in which he oversaw the Iraq and Afghanistan wars and recent US military involvement in Libya, "has been the greatest honor and privilege of my life and for that I will always be grateful."

He thanked the two presidents he served in the post -- Republican George W. Bush and Democrat Obama.

Gates' last day is Thursday.

At an outdoor ceremony at the Pentagon marking his retirement, Obama called Gates a humble American patriot, a man of common sense and decency, and one of the nation's finest public servants. Obama also said he considers Gates a friend.

Gates became defense secretary in December 2006 under Bush. He is being replaced by outgoing CIA Director Leon Panetta.

US President Barack Obama (2nd L) surprises Defense Secretary Robert Gates (L) by presenting him with the President Medal of Freedom as Chairman of the Joint Chiefs of Staff US Navy Admiral Michael Mullen (R) looks on, during his farewell ceremony at the Pentagon in Arlington, Virginia, June 30, 2011. [Photo/Agencies]