The seven-time Formula 1 world champion, who remains in hospital following his skiing accident at the end of last year, won the inaugural Bahrain GP in 2004.
Track chairman Zayed Al Zayani said Schuamcher's family had given the move their blessing.
"With the support of his family, it is a great privilege to be able to honour arguably the greatest racing driver in the history of F1 and someone who the people of Bahrain hold close to their hearts," said Al Zayani.
"From his first appearance at the BIC in 2004, he immediately became an inspiration for all those who love motorsport in the Kingdom and it is therefore natural for us to recognise him in this way.
"The team at the BIC continues to offer Michael and his family its best wishes."
Schumacher advised the team behind the Bahrain GP during the building of the track in the early 2000s, and he also made his return to the sport at the 2010 Bahrain GP after three seasons away.
His manager Sabine Kehm added: "Michael's family would like to thank the Bahrain International Circuit for this gesture, acknowledging Michael's achievements in Formula 1 and interest in the BIC circuit design.
"We take it as a recognition for his passion for motorsport.
"I am convinced Michael will love the idea and feel very honoured about having a BIC corner named after him."
DID YOU KNOW?
Bahrain is not the first active grand prix circuit to name a corner after Michael Schumacher.
The fast left-right Turn 8/9 combination at the Nurburgring, where Schumacher won five grands prix, was renamed the 'Schumacher S' ahead of the 2007 European Grand Prix.
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- Bahrain International Circuit