Best known for his films like "Chandni Bar", "Page 3", "Traffic Signal" and "Fashion", Bhandarkar will be given the honour at the annual convocation ceremony of the educational institute on Saturday, read a statement.
Bhandarkar is known for showcasing real life issues through his films. He says that such appreciation gives him a push to do better.
Bhandarkar said: "I owe my success and recognition to the movies I have made and the whole team behind it. These recognitions are also a responsibility that push you to do better."
In an official statement, a Rai University spokesperson said: "We want to honour the hard work and commitment of the director who hails from a middle class, non-filmy background and has carved a unique space for his genre of cinema through his sheer perseverance and focus."
Bhandarkar, whose last release "Calendar Girls" bombed at the box office, has been named for Padma Shri honour this year.