The high distinction at Buckingham Palace makes the 75-year-old Chretien only one of 24 British Commonwealth members allowed in the order, the Canadian Broadcasting Corp. reported.
The order also allows for honorary membership among foreigners.
It was established by King Edward VII in 1902 to recognize "individuals of exceptional distinction in the arts, learning, sciences and other areas such as public service," a release from the palace said.
Past recipients include Mother Teresa, Albert Schweitzer and Nelson Mandela, the CBC said.
Chretien is only the fourth Canadian to receive the honor after neurosurgeon Wilder Penfield and former prime ministers, William Lyon Mackenzie King and Lester Pearson, the report said.