The award was conferred on the 39-year-old master batsman by the Australian Arts Minister Simon Crean here. He was presented with a medal and a cricket stump.
Tendulkar became only the second Indian after former Attorney General Soli Sorabjee to get the honour.
Sorabjee was made an Honorary Member of the Order of Australia (AM) "for service to Australia-India bilateral legal relations" in 2006.
Tendulkar is the fourth non-Australian cricketer to be made an Order of Australia AM, the other three being West Indian legends -- Brian Lara, Sir Garfield Sobers and Clive Lloyd.
Lara was made an honorary member in 2009 while Lloyd was conferred with the award way back in 1985. Sir Garfield Sobers got the award in 2003.
Tendulkar is considered as one of the greatest batsman the game has ever produced with more than 30,000 international runs under his belt. He has scored 15,533 runs in 190 Tests besides a mammoth 18,426 runs in 463 ODIs.
Australia minister Simon Crean said Tendulkar deserved the honour.
"From the heart of the game in London to the streets of Mumbai and throughout the world, cricket unites people from many cultures. Cricket is Australia's national game and one that we share a great love of with India. Our two countries embrace the game like nowhere else.
"Today I am proud to have this opportunity to honour a great sportsman, a great cricketer, a philanthropist, and someone who has inspired a generation - Sachin Tendulkar," Crean said.
Australian Prime Minister Julia Gillard had announced the honorary AM for Tendulkar when she visited India last month.
"As the first batsman in international history to score 100 hundreds earlier this year Sachin Tendulkar's record is second to none. Today we are honouring not just what he has done on the field of play, but also what he has done off it," Crean said.
"Along with his cricketing prowess, Sachin has contributed substantially to philanthropy and supports a range of charitable causes as well as sponsoring over 200 underprivileged children each year.
"He is a global ambassador and role model for cricket, for sport and for social responsibility and a worthy recipient of this honour," he added.