The 43-year-old is better known for his fund-raising efforts to help rehabilitate victims of the devastating Haiti earthquake and his support for pro-democracy Myanmmar leader Aung San Suu Kyi.
Baggio will receive his accolade in the Japanese city of Hiroshima on Friday, Nov 12.
Reacting to the news of the award, Baggio said that the Peace award meant more to him than any of the accords he won for the achievements on the football field.
"This is better than the Golden ball award. Compared with this other personal and professional achievements pale into insignificance," Baggio told Italian news agency Ansa.
The Buddhist, who was crowned FIFA player of the year in 1993, retired from football in 2004
World Summit of Nobel Peace Laureates awards World Peace Award every year. In 2009, Scottish singer Annie Lennox was awarded for her efforts to fight against AIDS. Vocalist of rock band, U2, Bono won the award in 2008 for campaigning against poverty and debt in Africa.