The presentation was made Wednesday night at a gala dinner in Halifax, the largest city in the federal riding she once represented.
Federal NDP Leader Thomas Mulcair issued a statement describing McDonough as a pioneer for women in politics.
Mulcair says McDonough brought the federal NDP back to life in the 1997 election, making historic breakthroughs in Nova Scotia and New Brunswick.
Prior to entering the federal arena, McDonough served as leader of the NDP in Nova Scotia between 1980 and 1994.
She won the federal leadership in October 1995 and was succeeded by Jack Layton in 2003.
Note to readers: This is a corrected story. A previous version incorrectly reported that the award was made Tuesday.