The second woman ever named to the Supreme Court, Ginsburg, 86, was honored as a voice for equal justice in battling discrimination, said the Berggruen Institute in awarding its annual prize for philosophy and culture.
She will donate the $1 million prize money to charities or non-profits of her choosing, the institute said.
Ginsburg, who is on the court's liberal wing, was recently treated for pancreatic cancer but has indicated she had no plans to step down.
"Ginsburg is a lifelong trailblazer for human rights and gender equality," said the institute, a Los Angeles-based think tank that focuses on political and social institutions.
Nicholas Berggruen, the institute's founder and chairman, said: "Frankly considering the times, I think that it's an incredibly thoughtful choice because it's all about what democracy is.
"If you look not just at the U.S. but if you look around the world, democratic institutions, the fabric of what makes a democracy work are under attack," he told the Thomson Reuters Foundation.
"She has consistently defended the institutions and the laws that makes democracy work."
Since it was first awarded in 2016, the Berggruen prize has been given to philosophers and scholars from Canada, Great Britain and the United States.
"Ruth Bader Ginsburg rose from modest beginnings to become one of the most respected, and most beloved, jurists of our time," said Amy Gutmann, president of the University of Pennsylvania and a prize juror, in a statement.
"She inspires women and men of all ages to realize that a democracy thrives to the extent that it provides every citizen equal footing to achieve their dreams."
Ginsburg, whose nickname among fans is "Notorious RBG" based on the name of the late rapper Notorious BIG, is the court's oldest justice. She was appointed in 1993 by Democratic President Bill Clinton.
If Ginsburg, one of the nine-member court's four liberal justices, left the court, Republican President Donald Trump could replace her with a conservative, which if approved by the Senate would shift the court further to the right.
Ginsburg was not available for comment, the institute said.