Kuno will receive the PDSA Dickin Medal in a virtual ceremony in November, giving him “the highest animal honour for military animal valour”.
The three-year-old Belgian Shepherd Malinois and his handler were deployed on a foreign mission in 2019 on a compound raid when they came under attack.
Against grenade and machine gun fire from an insurgent, Kuno tackled the gunman, allowing the mission to be completed successfully.
Kuno was hit by bullets in both back legs during the assault, with part of one limb having to be amputated before he was flown back to the UK.
He then became the first UK military working dog to be fitted with custom-made prosthetic limbs.
Defence Secretary Ben Wallace said: “Without Kuno, the course of this operation could have been very different and it’s clear he saved the lives of British personnel that day.
“Kuno’s story reminds us not only of the dedicated service of our soldiers and military dogs, but also the great care that the UK Armed Forces provide to the animals that serve alongside them.”
Kuno will become the 72nd recipient of the PDSA Dickin Medal, with previous honours going to 34 dogs, 32 Second World War messenger pigeons, four horses, and one cat.
PDSA director-general Jan McLoughlin said: “Kuno’s heroic actions undoubtedly changed the course of the mission and saved lives.
“He took on the enemy without fear or hesitation, never faltering from his duty despite being seriously injured.
“For his bravery and devotion to duty, he is a thoroughly deserving recipient of the PDSA Dickin Medal and we look forward to formally presenting his award later this year.”
