From the Super Mario Wiki
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The Giant Star is a Power Star that appears in Super Mario 64 and Super Mario 64 DS. In the Nintendo 64 version, the Giant Star looks like the other Power Stars in the game, except bigger than usual. In the DS version, a tiny rainbow in the form of a circle, as well as a few extra sparkles, surrounds the Giant Star.
The Giant Star can be obtained by defeating Bowser in the final Bowser level, Bowser in the Sky. After being defeated, Bowser will vanish, revealing the final star, the Giant Star. By grabbing this star, Mario will transform into Wing Mario and start flying. After returning to Princess Peach's Castle, Mario then uses the Giant Star to release Princess Peach from the stained glass window she was trapped in above the entrance to the castle.
Unlike other Power Stars, the Giant Star will not increase Mario's Star total once collected; this is probably because the game isn't saved when this star is collected.