Dame Olivia, the granddaughter of Nobel Prize-winning physicist Max Born, moved to Australia when she was six after her father Wilfred, a former MI5 officer who worked on the Enigma project, became a professor at the University of Melbourne. She was born in Cambridge, UK.
"I am very proud of my British ancestry and so appreciative to be recognised in this way," she added.
Olivia leads a list of showbusiness figures to be honoured by the Queen that also includes filmmakers Sam Mendes and Steve McQueen, actress Wendy Craig, TV presenter Floella Benjamin, Queen drummer Roger Taylor and singer Billy Ocean.
In August, the four-time Grammy winner, who is battling stage 4 cancer after being diagnosed late last year, revealed to Entertainment Tonight that despite the obstacles, her outlook remains positive.
"I just want everyone to know, I'm here, I'm doing great," Olivia said.
"I'm doing really well and I'm really healthy," Olivia continued.
"It was a challenging year because I broke my sacrum and I had to learn to walk again and everything. But I am strong and I am back and I'm feeling good and loving every minute."
This is the stars third bout of cancer.
Olivia was diagnosed with breast cancer 27 years ago and managed to overcome the disease. It returned again in 2013 and 2017, with doctors revealing she also has a tumour in the base of her spine.