The musician, who will be conferred the award in a special ceremony, will join the league of previous recipients including Burmese democracy activist Aung San Suu Kyi and former president of Ireland, Mary Robinson.
The 89-year old sitar player is currently on a visit to Australia and is due to perform with his daughter Anoushka Shankar on March 20 here after shows in Adelaide and Sydney.
The degree will be conferred by the University of Melbourne Chancellor and Chairman of the Australia India Institute, Alex Chernov on the musician tomorrow.
The honorary degree of Doctor of Laws is awarded by the University to recognise people who are distinguished by eminent public service or outstanding cultural achievement.
"A singular phenomenon in the classical music world of East and West, Ravi Shankar was the brain behind the 1971 'Concert for Bangladesh' with George Harrison to raise money for Bangladeshi refugees, that paved the way for today's high-profile benefit concerts," said the university statement.
Last year, Bollywood megastar Amitabh Bachchan had turned down the Honorary Doctorate offered to him by the Queensland University, saying that he could not accept an honour from a country where his compatriots are ill treated.
The continued attacks against Indian students in the country had led to an all time low in Indo-Oz relations.