He will be formally honoured at a meeting of councillors on October 14, said Trafford Council.
Sir Alex is also being recognised by the local authority with a road near Old Trafford stadium having its name changed from Waters Reach to Sir Alex Ferguson Way.
Sir Alex said: "I am delighted to accept this honour from Trafford Council. When I arrived at Old Trafford in 1986 I had little idea of the journey that awaited me. Over quarter of a century later, to receive the Freedom of the Borough of Trafford and to have a part of Trafford carrying my name is truly humbling."
Council leader Matt Colledge said: "Sir Alex has contributed significantly to Trafford over a sustained period of time through his strong leadership of the Manchester United team and it was felt that the Honorary Freeman title and the renaming of the street was a fitting tribute to him.
"Football contributes significantly to the borough through the large number of visitors it attracts and jobs it creates. It has been through the success of the team that the club has grown in strength over the years, becoming one of the world's most successful and renowned clubs."