German President Christian Wulff presented Nowitzki with the Silver Laurel Leaf, praising the Mavericks forward as one of the "giants of German sport."
Nowitzki led the Mavericks to this year's NBA title over the Miami Heat and was named the finals MVP.
Wulff praised his fellow German for remaining "modest and restrained" despite his success.
Nowitzki frequently returns to Germany, where he and his sister run a foundation that supports children around the globe.
Nowitzki will play for Germany at the European Championship, which starts Tuesday in Lithuania. The two finalists qualify for the Olympics in London.