The 26-year-old, who has been heavily involved in anti-racism and anti-discrimination campaigns, has been made an MBE (Member of the Most Excellent Order of the British Empire).
Sterling, a Premier League and League Cup winner with City this season, has been subjected to racial slurs in stadiums and online during his career.
In 2019, he took part in an anti-racism campaign, “No Room For Racism” and spoke out last year as the Black Lives Matter movement gained traction following the murder of George Floyd in the United States.
The award comes just days after England players were booed by fans for taking the knee to protest against racial injustice before friendly matches ahead of Euro 2020.
Almost a quarter, or 262 people, on the main honours list, which rewards individuals’ bravery, service or achievement in their fields, have been recommended for coronavirus-related activities.
Liverpool and England midfielder Jordan Henderson received an MBE for services to football and charity, particularly during the Covid-19 pandemic.
Former Liverpool and England manager Roy Hodgson received a CBE in recognition of his long and distinguished career in football.
The 73-year-old stepped down as Crystal Palace boss at the end of the season and is likely to retire from management.