The prize has earlier gone to the likes of Nelson Mandela and Coretta Scott Young.
"I'm quite quite honoured," said Shabana from Jaipur. "I believe they had me in mind for this award for some time in recognition of my work with slum dwellers."
Shabana is all set to fly to London later this month with husband Javed Akhtar later this month.
"It will be given to me at the House Of Lords in London 26 October. And I won't have Javed miss this moment in my life for the world," says the diva of histrionics who has three films lined up before the end of the year.
"There's Reema Kagti's Honeymoon Travels Pvt Ltd and Manish Acharya's The Contest. Both by new directors, both in a lighter vein and great fun to do."
She's all praise for Acharya. "He's a walking talking encylopaedia on Hindi cinema. I rate him as high as Farhan Akhtar."
But the first Shabana starrer out will be J.P. Dutta's Umrao Jaan where Shabana plays Aishwarya 'Umrao' Rai's mother. What excites Shabana is the historical significance of the part.
"My mother has played Umrao's mother in Muzaffar Ali's film. And now I'm playing Umrao's mom in J.P. Dutta's film. Isn't that neat?"
Neater still is the fact that mom Shaukat and beti Shabana went shopping for Shabana's costumes in Umrao Jaan.
"Since my mom and I have a fair knowledge of fabrics and clothes we had great fun dressing up my character."
Shabana feels Umrao Jaan will dispel JP's image of a men's director. "JP was in despair, surrounded as he was by women on the sets all the time. But you know what? They'll stop calling him a men's director and start calling him a women's director after Umrao Jaan."