The award, which carries the name of Martin Luther King Jr, an apostle of peace, is about building bridges between humanity.
The award was presented to Mr Islam by Harry Johnson, president of the Memorial Foundation Inc, and one of the honorary vice-chairs of the event, which was held at Willard Intercontinental, the American Bazaar reported on Monday.
"I feel doubly blessed to be given this honor because of the indelible connection between King and that other famous civil and human rights leader from my homeland of India, Mahatma Gandhi," said Mr Islam, who came to the US as a student in the 1970s.
He added that both King and Gandhi have been beacons to me in my personal life, and charitable and philanthropic involvement".
"More lives have been lost in the past 100 years than at any given point in time. Whether it is in the name of religion, nationalism or any other extremist ideology, thousands are being killed every year," he said.
Last year, President Obama appointed him to the board of Trustees of the Kennedy Center.
He also serves on the International Advisory Committee of the US Institute of Peace.
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