The honor is given annually to an individual who displays courage and conviction while striving to secure liberty for people worldwide. It comes with a $100,000 cash prize.
Ali will be awarded the medal on Thursday at a ceremony at the National Constitution Center.
Ceremony officials say the 70-year-old Ali has built a legacy as a "tireless humanitarian and philanthropist." They call him a fighter for religious and civil rights, and an ambassador for peace and justice worldwide.
Previous medal recipients include rock singer and human rights activist Bono, former South African President Nelson Mandela and former President Jimmy Carter. Six winners later received the Nobel Peace Prize.