The 50-year-old from Warracknabeal in Victoria is known for his dark lyrics and songs about lust, religion, madness, murder and revenge.
From his beginnings with the post-punk band The Birthday Party, to his prolific output as Nick Cave and the Bad Seeds, along with his solo recordings and soundtrack work, Cave is one of the country's more diverse artists.
ARIA Awards committee chairman Ed St John said Cave's 30-year career would be recognised when he is inducted into the Hall of Fame at the ARIA Awards ceremony on October 28.
“Nick Cave has enjoyed - and continues to enjoy - one of the most extraordinary careers in the annals of popular music,” Mr St John said.
“His contribution over the past 30 years was never limited by geography or nationality and nor could it ever be described in terms of hit records, chart positions or radio airplay.
“He is an Australian artist like Sidney Nolan is an Australian artist - beyond comparison, beyond genre, beyond dispute.
“As an industry we should be immensely proud and humbled by Nick Cave's achievements.”
Cave's most commercially successful album was the 1996 record Murder Ballads, which featured a duet with Kylie Minogue: Where The Wild Roses Grow.
The sometime actor, author, and screenwriter has also turned his hand to a number of film projects.
Cave wrote the screenplay for the 2005 film The Proposition and the accompanying score with friend and fellow Bad Seed Warren Ellis.
He also collaborated on the soundtrack for the new Brad Pitt film, The Assassination of Jesse James by the Outlaw Robert Ford.
Cave is the final Hall of Fame inductee for 2007, joining Jo Jo Zep and The Falcons, Radio Birdman, Brian Cadd, Hoodoo Gurus, Marcia Hines and Frank Ifield who were inducted in July.