The Foreign Office announced early on Monday that Gates will become a Knight Commander of the Most Excellent Order of the British Empire. This is one of the highest honors that Britain can bestow upon those born outside the United Kingdom.
"Microsoft technology has transformed business practices, and (Gates') company has had a profound impact on the British economy," the foreign secretary, Jack Straw, said in a statement.
According to The Sunday Telegraph, the chancellor, Gordon Brown, recommended that Gates, whose personal fortune is estimated at $40 billion, should receive the award.
Gates' success has made him a popular figure with several senior U.K. politicians, but this hasn't been without its problems. In 2001, the prime minister, Tony Blair, was accused of giving Microsoft free publicity, after the software executive visited the company's U.K. headquarters just before the launch of Office XP.
A date hasn't yet been set for Gates' investiture. Once it takes place, he will have joined a select group of honorary knights, including former U.S. Presidents Bush and Reagan, Steven Spielberg, Colin Powell, Gen. Norman Schwarzkopf and Bob Hope.
However, unless he renounces his American citizenship, he won't be able to refer to himself as "Sir Bill Gates," but writing KBE after his name will be allowed.
Gates is visiting London this week to appear at conference on "Advancing Enterprise." He is also expected to appear at Monday's "Developing Software for the future Microsoft Platform" event in London's QEII conference center.
Graeme Wearden of ZDNet UK reported from London.