AFI Board of Trustees Chairman Howard Stringer announced Fond will receive the award at a star-studded tribute June 5.
"Jane Fonda is American film royalty," Stringer said in a statement. "A bright light first introduced to the world as the daughter of Henry Fonda, the world watched as she found her own voice and forged her own path as an actor and a cultural icon. Today she stands tall among the giants of American film, and it is AFI's honor to present Jane Fonda with its 42nd Life Achievement Award."
Fonda is a seven-time Academy Award nominee. She won best actress Oscars for "Klute" in 1971 and "Coming Home" in 1978.
Fonda's 40-plus films include "Lee Daniels' The Butler," "9 to 5," "Cat Ballou," "On Golden Pond," "The China Syndrome." She can now be seen on the TV series "The Newsroom."
2014: The Year in Music [PHOTOS]