The designer, 73, who has influenced clothing design since the mid-70s when she unleashed her controversial punk designs on an unsuspecting public, was inducted in the awards’ Hall of Fame for making a “significant contribution to Scottish fashion and industry”.
Those previously honoured include model Stella Tennant and photographer Rankin.
The awards’ founder, Tessa Hartmann, said that Westwood had shown an “undeterred loyalty and unparalleled love and passion for Scottish textiles and fabrics”.
She said Westwood was being recognised for establishing her Gold, Red and Man labels and Anglomania collection, as well for the “significant impact” she has made for campaigning for human rights and environmental issues.
Ms Hartmann added: “She personifies the powerful and subversive originality of British fashion and has done more for Scottish textiles than any other designer of her generation.
“Her brand name is synonymous with the tartan pattern and her fascination for this iconic fabric is unrelenting. By using a mix of different tartans, her ensembles explore the rich depth of colour and diversity of the traditional checked pattern that is adored around the world.”
Ms Hartmann told how Dame Vivienne even created her own clan and tartan named MacAndreas, after her husband and design partner, Andreas Kronthaler, who is 25 years her junior.
Co-hosting the show, held in London’s Northumberland Avenue, was the Secretary of State for Scotland Alistair Carmichael MP, who also praised Westwood’s use of Scottish textiles.
He said: “The Scottish fashion industry will be forever indebted to Dame Vivienne.”
Accepting the honour, Westwood spoke out against fracking and broached the subject of Scottish independence, saying it could be “a model to us all. . . if it could become a people-friendly society”. She also paid tribute to her late former husband Malcolm McLaren, with whom she had set up the controversial Sex fashion shop in London’s King’s Road during the 70s, that became the focal point for punk band the Sex Pistols.
Among those attending the awards were designers Christopher Kane, Holly Fulton and Pam Hogg, as well as pop star Pixie Lott and Scottish TV presenter Jenni Falconer.
Dundee-born Hayley Scanlan was named Young Scottish Designer of the Year for the second time, having been awarded the title in 2012. The International Designer title was taken by Simone Rocha, a graduate of London’s acclaimed Fashion MA at Central Saint Martin’s College in 2010.
Supermodel David Gandy was given the prestigious Founders Awards for his support of Scottish and British fashion over the last nine years.
Christopher Kane was Scottish Designer of the Year, whilst sixteen-year-old Jean Campbell was named Scottish Model of the Year having secured campaigns with Burberry and featured in British and Italian Vogue. Singer Amy Macdonald was crowned Fashion Icon.