Organisers said he was awarded the 2013 prize for "an exceptional contribution to affirming life's spiritual dimension".
The Templeton Foundation also hailed Tutu's "deep faith and commitment to prayer and worship".
The 81-year-old Nobel peace laureate, who rose to fame in the 1980s as a vocal opponent of South Africa's white-minority apartheid regime, will be presented with the award at a ceremony in London on May 21.
The former Anglican archbishop of Cape Town spoke out vigorously against apartheid during the years when Nelson Mandela was in prison. When Mr Mandela became president he chose Tutu to chair South Africa's Truth and Reconciliation Commission.
Cape Town's St George's Cathedral will host its own celebration of the prize on April 11.
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