The musician and activist, who began his musical career in punk band Riff Raff, will be presented with the “roots award” at the event in Glasgow.
Bragg – often referred to as the “Bard of Barking” – will also perform at the show, which will be broadcast live on 30 January.
The singer-songwriter has long had elements of folk in his music from his days as a solo act in the early 1980s. In 1996 he brought unrecorded lyrics by US folk legend Woody Guthrie to life by setting them to music.
The roots award is given to recognise “an outstanding contribution to folk music from a grass-roots level upwards”.
Lifetime achievement awards will be presented to fiddler Aly Bain, songwriter and guitarist Roy Harper and Caledonia songwriter Dougie MacLean.