The 39-year-old Tendulkar, who is currently in South Africa playing in the Champions League Twenty20, will become only the second Indian after former Attorney General Soli Sorabjee to get the honour.
Sorabjee was made an Honorary Member of the Order of Australia (AM) "for service to Australia-India bilateral legal relations" in 2006.
"Cricket is of course a great bond between Australia and India. We are both cricket-mad nations. I am very pleased that we are going to confer on Sachin Tendulkar, membership of the order of Australia (AM)," Gillard, who is on a visit to India, told reporters here.
"This is a very special honour very rarely awarded to someone who is not an Australian citizen or an Australian national. The award will be conferred on him by cabinet Minister Simon Crean when he visits India," she said.
"So, a special honour and a very special recognition of such a great batsman. The honour is very special and Sachin is a very special cricketer."
Tendulkar is not the first cricketer to be made an Order of Australia AM as in 2009, West Indies legend Brian Lara was also made an honorary member.
Another West Indies legend, Clive Lloyd, is an Honorary Officer in the Order of Australia, having been conferred the award way back in 1985. The right-handed Tendulkar, considered the finest batsman in contemporary cricket, has 15,533 runs in 190 Tests besides a mammoth 18,426 runs in 463 ODIs.
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