The former Liberal Democrat leader will become Sir Nick Clegg for his services as Deputy Prime Minister during the last coalition government.
Although a party spokesperson told Sky News that they would not "comment on any honours list speculation", his new title is expected to be formally announced on Saturday.
A fierce campaigner for Remain in the EU referendum, Mr Clegg's award will likely rile ardent Brexiters.
Leave champion Nigel Farage claimed last week he was being left out of the 2018 list because of his politics.
He told the Daily Telegraph: "Of course I have not got an honour of any kind - I am not a Remainer.
"Every one of them got CBEs, they got knighthoods, quite extraordinary."
Mr Clegg's honour comes after he lost his Sheffield Hallam constituency in June's snap General Election.
He was beaten by Labour's Jared O'Mara, who is currently suspended by the party pending investigation of historical offensive online comments.
A new Lib Dem candidate has already been selected for the seat and Mr Clegg himself said he did not want to stand for re-election nor be given a peerage, meaning his exit from Parliament is at least semi-permanent.