President Maithripala Sirisena awarded the honourary title to retired Gen Fonseka at an official ceremony in the capital.
Sirisena said ensuring justice for the 64-year-old former army chief was a "responsibility undertaken by the government in our quest for justice for the whole of the army."
Fonseka, who became the first Sri Lankan to receive the title, was jailed after he unsuccessfully tried to challenge the Rajapksa's re-election bid in 2010.
He was bestowed the title for "achieving the victory over terrorism".
Fonseka was charged with treason by the previous Rajapksa regime.
Soon after his 2010 poll defeat, Fonseka was detained on a corruption charge relating to military procurements and then given a 30-month jail sentence. He spent two years in jail.
He was stripped of his rank, pension and medal he received during his 40-year career and also denied the right to contest polls for seven years.
He was eventually released under the international pressure in May 2012.
Fonseka had said he would testify before international tribunals probing the possible war crimes charges during Sri Lanka's nearly three-decade conflict with the LTTE, angering the Rajapaksa government.
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