The honour, which requires no ministerial involvement but is given purely on the whim of the Queen, places the poet among an eclectic mix including Baroness Thatcher, Dame Joan Sutherland, Lord Jenkins of Hillhead and Sir John Gielgud. Mr Hughes, poet laureate for the last 14 years, enjoyed huge success this year with Birthday Letters a volume of poems about his marriage to American poet Sylvia Plath.
Critics called the work - his first to touch on the painful relationship which led to his wife's suicide in 1963 - one of Hughes' best and said it placed him alongside Blake, Keats and Auden in the poets' pantheon. The anthology has sold 90,000 copies.
Tales of Ovid, Hughes' retelling of Metamorphoses, by Roman poet Ovid, won even more lavish praise as well as the pounds 21,000 Whitbread Book of the Year Award this year.
In March the translation also won the pounds 10,000 WH Smith Literary Award.
As Poet Laureate, the mantle he took over from John Betjeman at his death in 1984, he has written a tribute to Diana, Princess of Wales, and works for the Queen's 60th birthday and the Queen Mother's 90th, although he is not obliged to write for the Royals.
A collection of poems for official occasions was published as Rain-Charm for the Duchy and other Laureate Poems.
Mr Hughes, 68, a notorious recluse, declined to make any personal comment. But he was he said by close contacts to be delighted by the award. It is given to those who have advanced the arts, learning and literature.
The Queen was said to have chosen him partly because of his official title as Laureate but also simply as a recognition of his talent.
The Order of Merit, described as one of the most distinguished awards in Britain was founded in 1902.
As a special mark of honour it offers no title, but members can write the initials O M after their names. Only a set number of members can exist at one time, and the poet took the place of composer Sir Michael Tippett who died this year bringing membership of the Order to its full number of 24. Mr Hughes' is the 160th appointment to the Order since its foundation.
Other members include violinist Yehudi Menuhin, artist Lucian Freud, former Master of the Rolls Lord Denning of Whitechurch, architect Sir Norman Foster and industrialist Sir Dennis Rooke.Reuse content