The new name "eSwatini" means the same as the old name - "place of the Swazis" - but is in the local language.
In addition to the symbolic value, the king also has more practical motivations for changing the country's name.
King Mswati will hope that the nation formerly known as Swaziland will no longer be on the list of countries that confuse people.
Swaziland's King Mswati III is one of Africa's few remaining national monarchs.
Naija News learnt that King Mswati III declared the name change during independence day celebrations at a packed sports stadium in the second city of Manzini. The small, landlocked nation borders South Africa and Mozambique and has a population of about 1.3 million.
The currency will need to be changed due to having "Central Bank of Swaziland" on it.
It was the name the king used when he addressed the United Nations general assembly in 2017 and at the state opening of the country's parliament in 2014.
"I would like to announce that Swaziland will now revert to its original name", he said, dressed in a red and black military uniform.
It gained independence peacefully in 1968 after 62 years as a British colony. Rhodesia became Zimbabwe, Nyasaland switched to Malawi while Bechuanaland became Botswana. Despite the positive response from revellers who attended the celebration, the country will consider registering its new name with worldwide bodies such as the United Nations (UN) and the Commonwealth.
He also said the move comes as a way to avoid confusion with another nation very far away: "Whenever we go overseas, people refer to us as Switzerland", King Mswati said.