The Khel Ratna Award will now be known as Major Dhyan Chand Khel Ratna Award, Prime Minister Narendra Modi announced on Friday.
The Khel Ratna award is the highest sporting honour in the nation. It was officially known as Rajiv Gandhi Khel Ratna Award in Sports and Games.
The government's decision comes a day after the Indian men's hockey team ended the 41-year wait for an Olympic medal when it defeated Germany 5-4 and secured the first hockey medal for the country since the Moscow Olympics in 1980.
The women's hockey team too performed admirably and just missed out on a medal when it lost to Great Britain 3-4 and finished 4th earlier in the day.
Some of the recipients of the award in the past include Virat Kohli, hockey legend Sardar Singh, Sania Mirza, MS Dhoni, Vishwanath Anand, Dhanraj Pillay and Sachin Tendulkar. The prestigious award carries prize money of Rs 25 lakh.
"Major Dhyan Chand was among India’s foremost sportspersons who brought honour and pride for India. Our nation’s highest sporting honour should be named after him," said Modi in a tweet.
He further said he had been getting a lot of requests from citizens across India to name the Khel Ratna Award after Major Dhyan Chand.
"Respecting their sentiment, the Khel Ratna Award will hereby be called the Major Dhyan Chand Khel Ratna Award," the PM said.
Major Dhyan Chand is regarded as one of the greatest players to ever play the sport. He was a central part of the team that brought India three Olympic gold medals from 1928 to 1936.
He was honoured with the Padma Bhushan in 1956 and his birthday on 29 August is celebrated as National Sports Day in India every year.