Liverpool have announced the Centenary Stand at Anfield will be renamed The Kenny Dalglish Stand as part of the club's 125th anniversary celebrations.
The 66-year-old club icon has been honoured for his "unique contribution to the club", with his involvement at Liverpool spanning close to four decades.
An official renaming ceremony will take place later this year, though no date has been confirmed.
Liverpool owner John W Henry said in a statement: "It is testament to Liverpool's history and status that we are not lacking in truly great individuals, whose names could easily grace a stand at Anfield.
"But in Kenny Dalglish we have a person who carries such immense significance to the fabric of this club, so it feels somewhat incumbent on us to recognise this in a manner that is befitting to the man.
"He is unique, not just to Liverpool, but to the game in England as a whole, having achieved greatness as a player and then enjoyed such success as a manager. His record and trophies won on both fronts speak for themselves.
"However, Kenny's contribution to Liverpool goes beyond goals scored, points amassed and silverware placed in the cabinet. His values are Liverpool's values – he represents what is best about this football club.
"The leadership and solace he gave to individuals, the club and city as it tried to come to terms with the trauma and tragedy of Hillsborough transcended sporting achievement.
"His name is synonymous with our club, with our home and the city of Liverpool. Now it will be as visible as it is palpable."
Between 1977 and 1990, Dalgish represented Liverpool as a player and then player-manager from 1985, during which time he won 18 major trophies – racking up 515 appearances in the process.
Dalglish took charge once more in 2012, leading the club to glory in the League Cup – their first trophy in six years – and now serves as a member of the non-executive board.