The honour was bestowed on Aung San Suu Kyi during a visit to Burma by festival bosses.
The Nobel Peace Prize winner’s life and work has been used as the inspiration for Brighton Festival 2011.
Brighton and Hove City Council’s leader Mary Mears said: “This is something which is given very rarely as it is one of the highest honours any city can give to somebody.
“As this year’s guest director Aung San Suu Kyi is the voice of equality and freedom.
“For the festival to be able to have her as its director is amazing.”
Ms Suu Kyi was told about the honour by Andrew Comben, chief executive of Brighton Dome and Festival, when he made the 5,500-mile journey to see her, along with the chairman of the festival, journalist Polly Toynbee.
Coun Mears said Ms Suu Kyi was “absolutely delighted” to hear the news.
A special council meeting will now be held on May 19 to confirm the honour although Ms Suu Kyi will not be able to attend. Because of the political situation in Burma she is unable to leave the country, but it is hoped that her son may attend on her behalf.
Anna Roberts, executive director at Burma Campaign UK, said: “By making this award, Brighton is not only recognising Aung San Suu Kyi’s unwavering commitment to democracy but also drawing attention to the plight of Burma’s people, who are all too often forgotten.
“Even though she is now free, Burma’s people still suffer under one of the world’s most brutal dictatorships.”
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