Lady Gaga is one of five winners to receive the Lennonono Grant For Peace. The award will be presented by John Lennon's widow, Yoko Ono.
Taking place on what would have been John Lennon's 72nd birthday, the ceremony will be held in Iceland on Tuesday.
"Lady Gaga is one of the biggest living artists of our time," said Yoko.
"She is not only an artist, she is also an activist, using her art to bring better communication to the world. She is being acknowledged for her activism, and how her album 'Born This Way' has widely changed the mental map of the world. And how it has made us deal with the future world, which happens to be here already."
Other activists include the partially imprisoned Russian feminist punk-rock collective, Pussy Riot, peace activist Rachel Corrie, who died in 2003, author John Perkins and late writer Christopher Hitchens.
Lady Gaga has already decided to give her prize money to the Elton John AIDS Foundation, while Rachel's grant will go to the Rachel Corrie Foundation for Peace and Justice.
Christopher's money is going to 826 National to help encourage literacy among under-resourced youths and John Perkins has chosen Dream Change, a non-profit organisation that promotes positive change for more balanced communities worldwide.
Pussy Riot, on the other hand, have already received their grant druing a special ceremony in NYC last month. The money is being used to help the three imprisoned members' appeal to be released from jail.
Pictures of Gaga on her Born This Way tour