The prestigious award was presented to Modi by President Ibrahim Mohamed Solih during a ceremony here.
“The Most Honourable Order of the Distinguished Rule of Nishan Izzuddeen” is the Maldives’ highest honour accorded to foreign dignitaries, Foreign Minister Abdulla Shahid said on Twitter.
The two-day state visit of Prime Minister Modi is aimed at further cementing ties with the Indian Ocean archipelago.
President Solih and Modi exchanged plasantaries upon the prime minister’s arrival at Republic Square where he was accorded a ceremonial welcome.
Earlier, Prime Minister Modi and President Solih held delegation-level talks as the two countries signed a slew of agreements to strengthen bilateral ties in a number of key areas including defence.
The prime minister also inspected the guard of honour.
While Modi visited the Maldives in November 2018 to attend President Solih’s swearing-in, this visit is the first by an Indian prime minister at a bilateral level in eight years.
The relations between India and the Maldives deteriorated after the then President Abdulla Yameen imposed emergency on February 5 last year.
Some decisions by Yameen including imposition of restrictions on work visas for Indians and signing of a new Free Trade Agreement with Beijing also did not go down well with New Delhi.
However, ties were back on track under Solih’s presidency.
China views the Maldives as key to its Maritime Silk Road project in the Indian Ocean as it has already acquired Hambantota port in Sri Lanka and Djibouti in the Horn of Africa.