Iommi, who rose to fame alongside Ozzy Osbourne in the 1960s, worked alongside the Very Reverend Catherine Ogle in order to create a five-minute arrangement which celebrates peace and harmony.
How Good It Is was inspired by Psalm 133 and is performed by the Cathedral Choir. Iommi accompanies the ensemble on acoustic guitar.
Explaining his decision to temporarily exchange heavy metal with choral arrangements, Iommi, 68, said: "It felt like a nice thing to do, to be able to give something to the city. It's just a little bit different to Sabbath!"
Rev Ogle, who convinced Iommi to write the piece, was introduced to him by a mutual friend.
She said: "When Tony was unwell, we got to know one another better when I began to pray for him and kept in touch with him about his health.
"This is a most wonderful gift Tony offered to the Cathedral. The words come from scripture and are really positive about people living together in peace and harmony. That is what Birmingham is about."
In the early days of Black Sabbath, the band was rumoured to have links to Satanism.
"People used to think we were Satanists but we weren't," Iommi explained.
"The songs were the opposite and all about the dangers of Black Magic and Satanism. The closest we came was Black Magic chocolates!"