The Cabaret actress was presented with the ribboned-medal by French Culture Minister Frederic Mitterrand for her accomplishments in the entertainment industry during a ceremony held in Paris on Monday.
Minnelli told reporters that receiving the Legion of Honour was "a dream come true", adding that the award is validation of her life's work.
"Thank you for wanting me. Thank you for caring about me. Thank you for giving this wonderful tennis game of life that we have going together," the Academy Award-winning Minnelli beamed.
The Legion of Honour was established by Napoleon Bonaparte in 1802 as a tribute to those who have contributed to French society and culture.
Richard Attenborough, Barbra Streisand, Walt Disney and JK Rowling have all received the prize in previous years.
Arnold Schwarzenegger credited French audiences with being a "very important part" of his success when he accepted his own Legion of Honour earlier this year.
Minnelli picked up the 'Icon' prize at the Nordoff Robbins Silver Clef Awards two weeks ago.
> Minnelli feels "sad" for Lindsay Lohan
Watch footage of Liza Minnelli receiving the Legion of Honour below: