AFI Board of Trustees Chairman Howard Stringer said Nichols, who won an Academy Award in 1967 for directing "The Graduate," would receive the award in Los Angeles in 2010.
"Genius is a word oft overused in our world, but surely not in the case of Mike Nichols," Stringer said. "His artistry has spanned the mediums of modern storytelling -- movies, television and the stage -- and his gifts across five decades continue to inspire artists and audiences alike."
"I feel very blessed," Nichols said. "I was watching 'The Graduate' on my Blackberry last week and it really holds up."
Nichols, who came to prominence with Elaine May in stand-up comedy, received an Oscar nomination for his first film as a director, "Who's Afraid of Virginia Woolf?" He also was nominated for Oscars for "Silkwood" and "Working Girl."
He has been nominated for 14 Tony Awards, winning seven directing Tonys, including one in 2005 for "Monty Python's Spamalot." He has won four Emmy Awards, two each for producing and directing "Angels in America" and "Wit," and he and May received a Grammy for "An Evening with Mike Nichols and Elaine May."
Nichols joins a list of AFI Life Achievement Award recipients that includes Sean Connery, George Lucas, Meryl Streep, Dustin Hoffman, Clint Eastwood, Steve Spielberg, Elizabeth Taylor and Sidney Poitier.