Southampton City Council leader Royston Smith and chief executive Alistair Neill tackled Able Seaman Ryan Donovan on board HMS Astute in April 2011.
He had just shot dead Lt Cdr Ian Molyneux, 36, from Standish, Wigan.
Donovan was jailed for at least 25 years in September last year for murder and three counts of attempted murder.
Mr Smith and Mr Neill, who announced his resignation from the council on Friday, had been touring the vessel when Donovan fired six shots from an SA80 rifle in the control room.
Father-of-four Mr Molyneux tried to disarm Donovan after hearing shots on board the submarine but was shot in the head.
Mr Smith and Mr Neill later pinned Donovan to the floor until police arrived.
Mr Smith, who formerly served with the Royal Air Force, said: "It was a surreal situation to have been in."
Although he said the medal was the "best thing" he had been awarded, he added: "I wish it was for some other circumstances."
Mr Neill said: "Something of that significance never leaves you and it is right that you never forget things as extraordinary as what we experienced."
The citation for their medals, which were presented to them by the Queen at Buckingham Palace, said they placed themselves at great risk by choosing to tackle Donovan.
"By their actions they prevented further shootings and possible death or injury to others on board the submarine," it read.
Both men said their thoughts were with the family of Lt Cdr Molyneux, whose widow Gillian collected his posthumously awarded George Medal on Friday for his role in preventing a massacre on board HMS Astute on 8 April last year.
Donovan, of Dartford, Kent, admitted murdering Lt Cdr Molyneux and also admitted the attempted murders of Lt Cdr Hodge, 45, Petty Officer Christopher Brown, 36, and Chief Petty Officer David McCoy, 37.
Mr Neill will leave Southampton City Council in March 2013 to take up the same role at Herefordshire Council.
Two men who wrestled a gunman to the floor on a Royal Navy nuclear submarine have received the George Medal for bravery from the Queen.