The 29-year-old enjoyed the best season of his career and finished it ranked world No.1 after winning 24 matches in a row.
After reaching the final of both the Australian and French Opens, Murray claimed his third grand slam title at Wimbledon in July.
He then became the first tennis player ever to win a second Olympic gold medal in singles when he followed up his title in London with one in Rio.
Calls for Murray, who was made an OBE four years ago, to receive a knighthood have been growing all year and reached a peak after his remarkable end to the season.
The Scot won successive titles in Beijing, Shanghai, Vienna and Paris before defeating Novak Djokovic in the final of the ATP World Tour Finals at London’s O2 Arena to pip the Serbian to the year-end number one ranking.
Murray played down talk of a possible knighthood, saying: “Obviously it is the highest honour you can get in this country. But I feel like I’m too young for something like that.
“When I win any award or am presented with anything it is nice because it is recognition for what you have given your life to – up to now anyway.
“I am still young and there are still a lot of things that can go wrong. I could still mess up and make mistakes. I am just trying to keep doing what I am doing, working hard and achieving stuff.”
The sport’s only previous recipient was Australian Sir Norman Brookes, who was knighted for public service long after the end of his career in 1939.
Murray’s honor also recognizes his charity work. He is involved with a number of charities, including Unicef, the WWF and Malaria No More.