Wing Commander Muhammad Nouman Ali, who downed an Indian Air Force jet piloted by Abhinandan Varthaman on February 27, will be conferred with Sitar-e-Jurat while Squadron Leader Hassan Mahmood Siddiqui will be awarded with Tamgha-e-Shujaat.
The investiture ceremony will be held on March 23 next year after Pakistan Day parade in the capital, Paistan Army said in a statement.
Tensions between India and Pakistan escalated after Indian fighters bombed Pakistan-based terror group Jaish-e-Mohammed's biggest training camp near Balakot in February.
It came 12 days after 40 CRPF personnel were killed when a Jaish-e-Mohammad (JeM) suicide bomber rammed a vehicle carrying over 100 kg of explosives into their bus in Pulwama district of Jammu and Kashmir on February 14.
Following the bombing of the JeM training camp, the Pakistan Air Force carried out a retaliatory aerial combat, unsuccessfully targeting several Indian military installations.
Pakistan claims that its Air Force jets shot down two Indian fighter planes during the dogfight on February 27 and debris of one of planes fell on Pakistan side of the Line of Control while the other fell on the Indian side.
India has maintained that Pakistan downed a MiG 21 aircraft of the Indian Air Force while Indian Air Force shot down an F-16 jet of the PAF during the dogfight.
Varthaman, who downed a Pakistani jet in the aerial combat and was held captive for three days, has been conferred the Vir Chakra, India's third-highest war time gallantry medal.