Atwar Bahjat, 30, was posthumously given the Louis Lyons Award for her coverage of the February 22 bombing of a Shia mosque in Samarra, her home town, the foundation announced on Tuesday.
She was kidnapped and killed along with a cameraman and an engineer for the Dubai-based Arabic language news channel.
S Abdallah Schleifer, Al Arabiya's Washington bureau chief, said of Bahjat that "what motivated her was a sense of decency, not politics".
Eleven staff members at the television station have been killed since the war began in March 2003, he said.
The Lyons award is named after Louis M Lyons, a member of the first class of the Nieman Fellowship programme for journalists in 1939. It was established in 1964.
The 2006 Nieman class said it awarded the honour to Bahjat because she showed "impressive bravery" as a reporter at hospitals and disaster areas in Iraq.
Schleifer said the award was for all Iraqi journalists and "journalists everywhere in a world that seems more brutalised than ever".