President Pervez Musharraf conveyed the decision to Gill Woolmer, the widow of the coach, in a condolence letter he sent to her on Thursday, an official said.
The South African-born Woolmer, 58, died Sunday in the West Indies a day after Pakistan's shock exit from the World Cup following a defeat to minnows Ireland. Police in Jamaica said they were treating the death as suspicious.
"The sudden passing away of the much respected and loved coach of Pakistan cricket team deeply grieved me, just as it did the entire Pakistani nation," Musharraf said in the letter.
The Pakistani leader said Woolmer did his job with great distinction and commitment.
"Pakistan cricket shall forever be indebted to his services and this nation will always remember him for the joys he brought into the lives of millions of Pakistanis.
"In recognition of his valuable contribution in the field of sports the government of Pakistan has decided to honour Mr Bob Woolmer with the civil award of Sitara-i-Imtiaz (star of distinction)."
Officials said the posthumous award is expected to be received by Woolmer's widow in the Pakistani capital on August 14 on the occasion of the country's 60th independence day.