The Sovereign's Medal for Volunteers will be awarded to those who have made a significant, sustained, unpaid contribution to their community.
The new honour incorporates and replaces the existing Governor General's Caring Canadian Award, established in 1995 by then-governor general Romeo LeBlanc.
Governor General David Johnston announced the establishment of the new medal today, following its approval by Queen Elizabeth II.
He says the medal will emphasize Canada's commitment to giving.
The last federal budget gave the governor general an additional $2.8 million per year to update Canada's existing honours system in a bid to bring it more into the modern era.
In addition to the new medal, the money is being spent on more proactive outreach around the other available honours, including the Order of Canada and Meritorious Service Decorations.
The Sovereign Medal itself will bear two intertwined hearts, symbolizing generosity and the action of caring, while its ribbon will incorporate the blue and gold colours of the prior governor general's award while adding a deep red colour to represent the sovereign.
Canadian and non-Canadians will be eligible if their contribution brings benefit or honour to Canadians or to Canada.
Presentations of the existing volunteer award will continue until the inaugural Sovereign's Medal for Volunteers presentation ceremony in 2016.
And recipients of the prior award will subsequently receive the new medal as well.
The change to the new honour elevates the recognition available to volunteers for their work, among other things allowing them to wear the medal at ceremonies calling for dress "with decorations."