"Prime Minister has advised the President to approve the conferment of 'Sitara-e-Shujaat' to shaheed Aitzaz Hasan, a student of class IX in Hangu," said a statement released by the Prime Minister's Office.
It said Hasan's brave act saved the lives of hundreds of students and established a "sterling example of gallantry and patriotism".
Hasan died on Monday when the bomber detonated his suicide vest after the boy prevented him from entering the school in the restive Khyber Pakhtunkhwa province. There were nearly 2,000 students in the school at the time of the attack.
Earlier in the day, Khyber-Pakhtunkhwa police recommended to Chief Minister Pervez Khattak that the boy should be posthumously honoured for his bravery.
Provincial police chief Nasir Durrani wrote to Khattak, recommending a posthumous award for Hasan. "The suicide bomber tried to enter the school where hundreds of students were studying. Aitzaz Hasan sacrificed his life and stopped the bomber with bravery and courage," a police statement said.
The bombing was the first attempted suicide attack on a school. Local residents called for Hasan's sacrifice to be acknowledged at the federal level as he had demonstrated bravery, intelligence and courage.
"We the citizens believe that State of Pk must award Nishan-i-Haider to Pk's brave son Shaheed Aitezaz," journalist Nasim Zehra tweeted.
"I had never thought that my brother would die such a great death. He sacrificed his life to save humanity," Mujtaba, the brother of Hasan, told The Express Tribune.
Their father Mujahid Ali, who works in the UAE, said he had not come back home to mourn his son's death but to celebrate his life. "My son made his mother cry, but saved hundreds of mothers from crying for their children," he said.