The Queen Elizabeth Engineering Prize will be officially launched at London's Science Museum.
The £1m prize, funded by an endowment from a number of engineering companies, will be awarded biannually for exceptional advances in engineering.
The prize is designed to raise the profile of engineering, and the fund behind it is managed by an independent trust chaired by Lord Browne, president of the Royal Academy of Enginering and former chief executive of BP.
Lord Browne told the BBC that engineering "underpins every aspect of our lives", adding that it forms a "bridge between scientific discovery and commercial application".
He added: "Too often the engineers behind the most brilliant innovations remain hidden. The Queen Elizabeth Prize aims to change that. It will celebrate, on an international scale, the very best engineering in the world."
David Cameron said: "I am delighted that the Queen has put her name to this prestigious prize, which I hope will carry the same stature as the Nobel Prizes."
"For too long Britain's economy has been over-reliant on consumer debt and financial services. We want to rebalance the economy so that Britain makes things again - high-skilled, high-value manufacturing and engineering should be a central part of our long-term future."
Nick Clegg commented that the prize "flies in the face of the myth that engineering is a part of Britain's past... We are bringing engineering home".
Labour leader Ed Miliband said: "We now face huge global challenges in the future ranging from climate change and famine to an ageing population in the West. Just as engineering has helped us meet the big challenges in the past, it will be engineering that helps us meet these new challenges."
According to campaigners Engineering UK, there are over 550,000 engineering companies in the country, but they are facing a major shortfall in the workforce.
Imran Khan, director of the Campaign for Science and Engineering (Case), said the prize was a "fantastic way" to raise the profile of science and engineering as a driver of economic growth.
But he explained: "Our research base and workforce need to be the best in the world in order to compete - the current cuts we're seeing to science and engineering will hamper that.
"None of the main political parties have yet put science and engineering at the heart of their economic plans, and we hope that today's announcement will see that beginning to change."
Copyright Speakers Corner 2017