In recognition of her courage, the award will be called Gunjan Sarma Bravery Award, Chief Minister Tarun Gogoi told reporters.
"Gunjan showed exemplary bravery. Not only Assam but the whole nation is proud of her," he said.
"We will be giving her the first award...We have also taken up the matter for her name to be included in the list of brave children to be awarded in the coming Republic Day in Delhi at the national level," Gogoi said.
Releasing 10 of the children, the man wanted to take a seven-year old girl as hostage and flee away. But seeing the little girl cry, Gunjan, a Kendriya Vidyalaya student, offered herself to be taken as a hostage instead of the girl.
The gunman took her towards neighbouring Nagaland and in the morning abandoned Gunjan in a jungle from where she walked to a village. The locals informed the police to escort her safely to her home.