The Queen of Canada has presented the queen of CanLit with a rare royal honour.

Queen Elizabeth has named Margaret Atwood a member of the Order of the Companions of Honour for her services to literature.

The 79-year-old author of The Handmaid's Tale and its recently released sequel, The Testaments, shook hands with the monarch, who is 93, while accepting the award at a ceremony Friday at Windsor Castle.

Dressed in a dark dress, brightly multicoloured scarf and a wide-brimmed red hat, she told British media that she felt "a bit emotional" in the presence of the queen.

Founded by King George V in 1917, the Companion of Honour is an award for those who have made a major contribution to the arts, science, medicine, or government over a long period. There are just 65 companions at any time.

"When you see the Queen at her age and her schedule that she puts out, it's an inspiration to everybody, you just keep going," Atwood said after the ceremony.

'Neither of us expected to win this,' the Canadian author said of her and her British co-winner's rule-defying victory. 0:57

Earlier this month Atwood was one of two recipients of the Booker Prize, in a rare joint win with British author Bernardine Evaristo, author of Girl, Woman, Other.

Other Companions of Honour include actress Dame Maggie Smith, former British prime minister John Major and South African Archbishop and human rights activist Desmond Tutu.