"Maestro Muti is being recognized for his extraordinary contributions in opera and concert, as well as his enormous influence in the music world both on and off the stage," the jury said in the citation.
Muti, 69, is the second winner of the prize awarded by the Birgit Nilsson Foundation, which was established after the 2005 death of Nilsson, considered one of the greatest Wagnerian sopranos.
The decision to award Muti was unanimous, according to the foundation president and Nilsson's close friend, Rutbert Reisch.
Muti, who did not attend the announcement in Stockholm, said in a statement that he was moved when he heard he had been chosen for the "distinguished" award.
"I was deeply touched by the jury's accolade, all the more so given my profound admiration for this unique and extraordinary artist, both as an incomparable musician and as a great interpreter," Muti said.
Last week, the maestro defied doctors' advice and took to the podium at Rome's Teatro dell'Opera only five weeks after heart surgery following a fall from the podium while rehearsing. He ended the performance of Giuseppe Verdi's "Nabucco" by conceding a rare encore of the chorus and conducted the audience.
Reisch, who said Muti is now fully recovered from his illness, "personifies and exemplifies all of the qualities that were so important to Birgit Nilsson -- extraordinary work, dedication and passion for music over many decades."
Muti will receive the prize in the presence of Sweden's King XVI Gustaf and Queen Silvia at the Royal Opera in Stockholm on Oct. 13.