A Manchester City Council spokesman said: "We are grateful to Ariana Grande for her tremendous support for the city in the aftermath of the Manchester Arena attack".
The US pop star, whose benefit concert has helped raise nearly £3 million for the We Love Manchester Fund to help victims of the 22 May attack, will become the first recipient of a new honorary citizen of Manchester award.
The council is proposing a new system to recognise outstanding contributions to the city.
Council leader Sir Richard Leese told the BBC it was a fitting moment to recognise those who had made noteworthy contributions to the city.
The new honorary citizen award will only be eclipsed by Manchester's highest civic award, the freedom of the city, which has only been awarded four times this millennium.
"We've all had cause to be incredibly proud of Manchester and the resilient and compassionate way in which the city, and all those associated with it, have responded to the bad events of 22 May - with love and courage rather than hatred and fear".
Salman Abedi, 22, detonated a home-made bomb in the arena's foyer at the end of Ariana Grande's concert.
Ariana Grande's Manchester benefit concert One Love Manchester has been confirmed as the most watched TV event of the year so far.
There are also plans for an event to recognise those who acted selflessly in the aftermath of the incident.
The singer raised millions of pounds through her charity gig, and paid tribute to the 22 victims killed outside her concert. Proposals will be put before the full council by July 12.