The Date Night star, 40, has been chosen by officials at Washington, D.C.'s Kennedy Center for the Performing Arts as the 2010 honouree.
The award is primarily in recognition of her work as a writer and comedian on hit U.S. sketch show Saturday Night Live, where she famously mimicked former U.S. vice presidential candidate Sarah Palin during the 2008 elections.
Mark Krantz, executive producer of the Mark Twain award, says, "It's that job as a head writer on a show that's been a traditionally male-oriented show. (She) kind of broke the ceiling for many, many women in comedy."
Poking fun at veteran Golden Girls star and recent SNL guest host Betty White, Fey says, "I am truly thrilled to receive this honour. I assume Betty White was disqualified for steroid use."
Fey also gained critical acclaim for her work on TV comedy 30 Rock and wrote the screenplay for Lindsay Lohan's hit film Mean Girls.
She will be presented with the accolade on 9 November (10) at a ceremony in Washington, D.C., when she will join the ranks of previous recipients Bill Cosby and Steve Martin.