The 47-year-old worked for British fashion house Burberry for 17 years before stepping down from his role as president and creative officer in March 2018.
“Burberry encapsulates so much of what is great about Britain. As an organisation, it is creative, innovative and outward looking," Bailey previously said about the brand.
"It celebrates diversity and challenges received wisdoms. It is over 160 years old, but it has a young spirit”.
This will mark Bailey's second time receiving recognition from the palace, after he was awarded an MBE, or Member of the Most Excellent Order of the British Empire, back in 2009.
The former creative officer joined the company at the age of 29 after graduating with a Fashion BA (Hons) from the University of Westminster in 1993 and a Master's degree from the Royal College of Art in 1994.
Bailey went on to work as a womenswear designer at Donna Karan and senior womenswear designer at Gucci before settling as design director at Burberry in 2001.
He then moved up to chief creative officer and CEO in 2014 where he revived the heritage label from aesthetic and financial purgatory.
Since joining the luxury brand, campaigns under Bailey’s management were fronted by the likes of Cara Delevingne, Sienna Miller and Eddie Redmayne, while legions of celebrity fans from Joan Collins and Madonna to Kate Moss and Harry Styles, stayed faithful to the label throughout the designer's tenure.
After Bailey’s departure, Riccardo Tisci took the helm at Burberry after exiting Givenchy in February 2017, where he had been creative director since 2005.
Other famous faces to be recognised in this year's list include '60s model Twiggy, England football manager Gareth Southgate and author of The Handmaid's Tale, Margaret Atwood.
The full list of this year's honourees can be found on the Gov.UK website.
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