The band, who appeared for the final time before 45,000 fans in Stirling in August, were formed in the Isle of Skye in 1973.
They went on to break a number of records for live concerts in Scotland and toured regularly around the world.
Runrig were recognised at the climax of the Scots Trad Music Awards in Perth.
Simon Thoumire, founder of the "Na Trads," said: “Runrig forged the way for so many other bands.
They showed how Gaelic could be used in many different ways and wasn’t just something that was spoken in living rooms or used at ceilidhs.
"They also showed that Gaelic songs could be performed in stadiums and taken around the world. “They never, ever stopped working hard. They kept touring, they had great material and people kept coming back out to see them.
"It was also amazing how many young people that bought tickets for their final gigs.
“There hasn’t been another band like them.”
Runrig’s percussionist Calum MacDonald said: “It’s a tremendous honour for us to receive this award and not just any award.
"Gaelic has been important to Runrig – and part of Runrig – for 45 years. If we’ve been able to give the language even a little support, it’s something of which we’re extremely proud and something that gives us a great deal of pleasure.
“We write songs and we play music. It was only natural for us to want to do that in our own language.”
A stage show honouring Scotland’s First World War effort which Barbara Dickson led on a tour to mark the 100th anniversary of the conflict was named “event of the year”.
She took part in memory of her uncle David Dickson, who enlisted despite being underage and was killed in the Battle of the Somme.Skye-born Eilidh Cormack fought off competition from her brother Ruairidh to be named best Gaelic singer. Iona Fyfe, from Aberdeenshire, was best Scots singer.
Inverness outfit Elephant Sessions won the coveted best live act prize, while fiddler Duncan Chisholm, who is also from the Highland capital, secured double glory after winning the best album and best composer awards.
The best folk band award was won by "Gaelic supergroup" Daimh, who are fronted by Inverness-born singer Ellen MacDonald.
Talisk, who were named best folk band at the event a year ago, were named as the winners of a new traditional music bursary worth Â£25,000. One of Scotland's most lucrative prizes, it was launched this summer by Belhaven Brewery to allow up-and-coming acts to raise their profile.
FULL LIST OF WINNERS
Album of the Year: Sandwood by Duncan Chisholm
Club of the Year: Partick Folk Club
Composer of the Year: Duncan Chisholm
Community Project of the Year: Care for a Ceilidh
Event of the Year: Far Far from Ypres
Gaelic Singer of the Year: Eilidh Cormack
Instrumentalist of the Year: Calum Stewart
Live Act of the Year: Elephant Sessions
Citty Finlayson Scots Singer of the Year: Iona Fyfe
Scottish Dance Band of the Year: Susan MacFadyen
Scottish Folk Band of the Year: Dàimh
Scottish Pipe Band of the Year: Inverary and District Pipe Band
Trad Music in the Media: Pipeline on BBC Radio Scotland
Music Tutor of the Year: Anna Wendy Stevenson
Up and Coming Artist of the Year: Assynt
Venue of the Year Award: Drygate Brewery in Glasgow
Services to Gaelic Award: Runrig
Hamish Henderson Services to Traditional Music Award: Pete Shepheard
Services to Scots Language: Janet Paisley