The 86-year-old helmer becomes the first woman to be selected for this distinction, reported Deadline.
Only three other directors, Woody Allen, Clint Eastwood and Bernardo Bertolucci, have been recognised with the honour.
She will be honoured at the closing ceremony of the 12-day festival (May 13-24).
From her first film, "La Pointe Courte" in 1954, Varda's style reflected elements of what would become the French New Wave although because she preceded that movement her work is more Left Bank in style.
Her films tended to focus on women and her subsequent "Vagabond" in 1985 examined the investigation of the death of a female drifter.
She married film director Jacques Demy in 1962 and after his death in 1990, she made "Jacquot de Nantes", about his life and death.
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