The pair came up with the name while on their lunch break.
"We stopped at the $2 Shop and found ourselves talking about it. Then we saw some glow sticks and thought they would tie in well with the whole fireworks thing.
"It ties in with the Grow Rotorua idea as well,'' Ms Smith said.
She said short, sharp, easy-to-remember names were popular and Glo didn't highlight one specific event being held.
In July, the council announced it would be looking to change the format of the long-running Mardi Gras, which featured a concert and fireworks display at The Village Green on New Year's Eve.
The new Glo festival will feature music, arts and street theatre, night markets, food and the largest fireworks display in New Zealand.
Tutanekai St would be the heart of the three-day celebration with part of the street closed off for events.
There will still be a concert and show at The Village Green on New Year's Eve, but it would start and finish earlier to make it more family-oriented.
The council has a budget of $40,000 for the annual event and additional funds would be found from local trusts and community organisations.
The second place name idea was "Burst'' by Janelle Marsters and David Jones with Shayne Campbell's "Oho-Ake'' (awakening), third.
Events and Venues event co-ordinator Kylie Gunn said with more than 50 it was hard to pick just one.
"But Glo was chosen as it was the best fit with the activities that are planned over the three-day festival, as well as the overall theme.
"We expect Rotorua will be `glowing' with pride as it celebrates all that has been achieved during the year and looks forward to the year ahead,'' she said.
Rotorua Event and Venues manager Martin Croft said one of the aims of the festival was to attract more people for longer stays to the city during summer.