The president of Deutsche Sporthilfe, Ann Kathrin Linsenhoff, said Graf was given the honour in recognition of her sporting achievements, her humanitarian work, and her service to the image of German sport in the world.
The greatest female tennis player to date, Graf won a total of 22 Grand Slam tournaments during her career, including seven at Wimbledon. She reached the top of the world rankings in 1987, and remained number one for 374 weeks.
Graf, who only learned of her award from the jury two weeks ago, was unable to attend the gala ceremony held on Saturday, May 31, in Berlin's Hotel Adlon. She had a previous engagement to attend with her husband, US tennis star Andre Agassi.
Graf will instead accept her award and prize money of €25,000 at a later date.
The tennis champ was also accepted into Germany's new Sporting Hall of Fame, along with eight-time Olympic canoeing medalist Birgit Fisher and IOC honorary member Bertolt Beitz.