Together with Arsenal boss Arsene Wenger, who also picked up an OBE, Houllier will be presented with the award by the Foreign Secretary, Jack Straw, at a ceremony in the Foreign and Commonwealth Office on July 9.
"To be given such an award is a great, great honour and to be recognised in this way at the same time as my good friend Arsene Wenger makes it even more special," he told the club website. "I am very proud to be considered worthy of such a prestigious award.
"This award is for Liverpool Football Club, the city of Liverpool and the fans who have always served as an inspiration to me. This honour must be shared with everyone associated with Liverpool Football Club, everyone who has Liverpool in their heart."
The Foreign Secretary said: "With skill and passion, Messieurs Houllier and Wenger have led two of the country's greatest clubs, Liverpool and Arsenal, to glory at home and in Europe.
"And they have become inspirational figures for many in the English and French game, acting as true Ambassadors for Franco-British relations.
"While each of us has our own club allegiance, we are all fans of these two Frenchmen who have become such an integral part of British sporting life.
"I look forward to congratulating them in person next month and presenting them with the honours they so richly deserve."