The 48-year-old was invited to the Queen's Berkshire residence, Windsor Castle, to receive the Britain-Australia Society Award.
Prince Philip, who is a patron of the organisation, was on hand to present the songstress with the 2016 gong.
Standing proudly in the palace's famous White Drawing Room, Kylie now joins the likes of Australian comedian Barry Humphries, who accepted the accolade in 2013.
Watch in the player above: Hollywood meets The Crown: stars collide with royalty!
"I am delighted to accept this award from the Britain-Australia Society," Kylie beamed following the fairy-tale moment.
"I'm a proud 'Aussie' but Britain has a very strong place in my heart having lived and worked here for many years."
"The Society does a wonderful job to promote the rich cultural ties between the two countries and I am honoured to be recognised by them in this way."
The UK fell in love with our golden girl over three decades ago when she starred in Neighbours as the lovable Charlene.
Lord Carrington is the President of the Society, and he couldn't have been more pleased with Kylie taking out the honour.
"I am delighted that Kylie Minogue is the recipient of the Britain-Australia Society Award for 2016," he said.
"As an Australian comfortably based in the UK, she personifies the best traits of Australians and Britons – warm, amiable, easy-going, talented and industrious – in her case to a superlative extent. This award recognises not only her extensive public profile but also her status as a cultural ambassador with a foot firmly in both countries."
"The relationship between Australia and Britain is demonstrably stronger and warmer for her presence."
This incredible achievement couldn't come at more welcomed time.
The musician had a heart-wrenching start to the year after she confirmed that she and her fiance, Joshua Sasse, had parted ways back in February.
Clearly putting her best foot forward, she told the Sydney Morning Herald, "I feel great actually!"
"It's not been the easiest times of late but that is a purely personal matter and I have no regrets."
"Life is about love and experience and learning and evolving and I am richer and thankful for all of the experiences in my life. I'm also very touched and thankful for the generous support from my fans."