His selection was announced by The Dorothy and Lillian Gish Prize Trust and the Gish Prize committee.
Redford is scheduled to be honored at a special Gish Prize ceremony Nov. 12 at the Hudson Theatre in New York City.
The Gish Prize includes a silver medallion and a $325,000 grant from the trust established in memory of silent film stars Dorothy and Lillian Gish.
The committee said in a news release that Redford is "being recognized for his pivotal role in the arts not only as a creative force, but also as a tireless supporter of emerging talent, independent endeavors, and the environment through his multidisciplinary Sundance Institute."
"This award has special resonance for me," Redford said in a statement. "Twenty-seven years ago, when I received the Academy Award for 'Ordinary People,' it was Lillian Gish who presented me with the Oscar. It was an honor then, as it is now with the Gish Prize. I am grateful to be following in the footsteps of the legendary Gish sisters, two true pioneers of American film. Sundance in a way continues their work, reaffirming their passion for art and film and their importance to life."
Notable deaths of 2014 [PHOTOS]