Former New Zealand prime minister John Key is set to receive Australia’s highest honour.

Mr Key will be appointed an Honorary Companion in the Order of Australia in Canberra on Tuesday, after the governor-general approved Malcolm Turnbull’s recommendation to give him the accolade.

“John was an outstanding leader of his country, and he is respected around the world for his influence in our region and beyond,” Mr Turnbull said in a statement on Monday evening.

“He was also deeply committed to advancing the Australia-New Zealand bilateral relationship and pursuing our common interests in the region and internationally.”

The Prime Minister said Mr Key helped drive economic growth in Australia and New Zealand, and ensured his country played its part in tackling international security challenges.

“He has been a great friend of Australia and has represented his nation, and our shared values, magnificently,” Mr Turnbull said.

“Lucy and I look forward to seeing more of John and Bronagh this side of the ditch and perhaps John and I can venture out for another paddle before too long.”

Governor-General Peter Cosgrove will invest Mr Key with the insignia of his appointment at a Government House ceremony on Tuesday afternoon.

-AAP