'American Pie' singer Don McLean and Irish band The Dubliners will be recognised for their contribution to folk music at the awards ceremony on February 8.
Mike Harding announced the awards on Radio 2, and called McLean a "truly great songwriter".
He said: "The truly great songwriters, who create works of such quality that they become standards across genres, are owed a debt of gratitude by the music world and I think it's fantastic that we're presenting Don McLean with this award."
On The Dubliners, Harding added: "When The Dubliners virtually invented the Dublin pub music scene 50 years ago, they changed the face of Irish music forever. They were exciting and different, with a real whiff of danger about them."
Don McLean scored two UK number one singles in the 1970s with 'Vincent' and 'Crying', while The Dubliners' biggest hits include 'Dirty Old Town' and 'Seven Drunken Nights'.
Donovan received the 'Lifetime Achievement' award last year.
Watch Don McLean perform 'Vincent' below: