The proposal was approved by the Union Cabinet at its meeting here, fulfilling a long-pending demand of the people of Karnataka, official sources said here.
Hiriya Kempegowda was a ruler under the Vijayanagar Empire who ruled most parts of Karnataka during the 16th century.
Having built the Bengaluru Fort and moved his capital from Yelahanka, he is widely accepted as the founder of Bengaluru.
The airport, run by a private-led consortium, would be renamed Kempegowda International Airport after the founder whose 503rd birth anniversary was observed this year.
The Civil Aviation Ministry had last year approved the proposal of the state government following efforts by then External Affairs Minister SM Krishna.
The state assembly had adopted a unanimous resolution on the matter last December, though there were differences earlier with some sections demanding that it be named after Tipu Sultan (who was born in Devanahalli) or social reformer Basaveshwara or former Mysore Dewan Sir M Visvesvaraya.
The Bengaluru airport, which became operational in May 2008, is one of the busiest in the country.
It is owned and operated by a GVK group-led joint venture Bengaluru International Airport Pvt Limited in which KSSIDC (a state government entity), Airports Authority of India, Siemens and Zurich Airport are also the shareholders.