This holiday is always celebrated on 17 June.
Also called Icelandic National Day, 17 June marks Iceland's move to complete independence from Denmark.
Iceland was proclaimed an independent republic on 17 June 1944.
Iceland actually gained independence from Denmark much earlier, on 1 December 1918 with the signing of the Act of Union with Denmark. The Act recognised Iceland as an independent state under the Danish crown.
The formation of the republic in 1944 was based on a clause in the 1918 Act which allowed for a change to the relationship between Iceland and Denmark in 1943.
Due to the German occupation of Denmark in 1943, a vote on the revision to the Act was delayed until after the Second World War finished.
The referendum was held in at the end of May 1944. Voters were asked whether the Union with Denmark should be abolished and whether to adopt a new republican constitution. Both measures were approved with more than 98% in favour and a voter turnout of 98.4%.
Although he would have preferred a different outcome in the referendum, King Christian X of Denmark sent a letter on 17 June 1944 congratulating Icelanders on forming their Republic.
The 17 June date was already a significant date in Iceland's history as it is the birthday of Jón Sigurdsson who was the leader of the 19th century Icelandic independence movement which led to the 1918 Act of Union.
17 June, was therefore chosen as Iceland's National Holiday as fitting date to mark the Independence from Denmark, the proclamation of the Icelandic republic and to recognize Jón Sigurdsson's efforts toward Icelandic independence.
Icelanders take to the streets to celebrate independence. Colourful ceremonies are followed by parades, street theatre, sideshows and outdoor dancing in the midnight sun all over Iceland.