The award is said to be the highest civilian honour bestowed by a United States president.

Mr Howard is being honoured for his role in fighting terrorism and for standing by the US as an ally during his 11 years as prime minister.

"Yes, I am honoured by it, more because of the compliment it pays to our country Australia," Mr Howard said.

"It's an indication of the very close relationship between our two countries and I'm very pleased that during the time as prime minister I was able to contribute too."

It was testament to the "very obvious" personal warmth between himself and President George W Bush.

Former British prime minister Tony Blair and Columbia's president Alvaro Uribe will also receive medals in the ceremony.

Mr Bush has awarded 78 of the medals during his two terms as US president.

Bush is conferring the prestigious award on his friends in an East Room ceremony on January 13 - exactly one week before he leaves office, White House press secretary Dana Perino said.

"The president is honouring these leaders for their work to improve the lives of their citizens and for their efforts to promote democracy, human rights and peace abroad," she said. "All three leaders have been staunch allies of the United States, particularly in combating terrorism."

The Medal of Freedom was established by President Harry Truman in 1945 to recognise civilians for their efforts during World War II. The award was reinstated by President John F Kennedy in 1963 to honour distinguished service. It is given to those deemed to have made remarkable contributions to the security or national interests of the United States, world peace, culture, or other private or public endeavours.

Prior to these three leaders, Bush has awarded 78 medals during his tenure in office.

Among the most controversial came in December 2004, when Bush gave the Presidential Medal of Freedom to former CIA Director George Tenet, former Iraq administrator L Paul Bremer and retired General Tommy Franks, three people central to his early policy in Iraq. Bush was especially criticised for including on the list Tenet, who came under fire for intelligence failures leading up to the September 11, 2001, attacks and the Iraq war.