Soul singer Al Green, '9 to 5' star Lily Tomlin and ballet dancer Patricia McBride were also saluted at the White House ahead of a gala concert.
Sting, 63, said it was "rare" for an Englishman to receive the honour, reported CNN online.
"I'm not sure when I'll wear it again, but I think I look rather fetching in it," he said of his rainbow ribbon.
The former Police frontman is set to join the cast of his Broadway musical 'The Last Ship', about shipbuilding in the north east of England.
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Tomlin, 75, also admitted she had been surprised by her selection, saying she had "never been privy to the insider's circle".
The event preceded a concert at the Kennedy Center for the Performing Arts which saw Lady Gaga, Bruce Springsteen and Bruno Mars sing Sting's hits.
The John F Kennedy Center for the Performing Arts has been honouring stars of the stage, screen and concert hall since 1978.