Reynolds, mother of Star Wars actress Carrie Fisher, has also headlined a show at her own casino in Las Vegas.
The award is the highest honour bestowed by the actors guild.
It is given out each year to an individual who represents "the highest ideals of the acting profession".
SAG president Ken Howard called Reynolds, who has been in showbusiness for 66 years, "a tremendously talented performer with a diverse body of screen and stage work".
"Her generous spirit and unforgettable performances have entertained audiences across the globe, moving us all from laughter to tears and back again," he added.
Reynolds kick-started her career at the age of 16 by winning the Miss Burbank competition, where she was spotted by film studio executives.
She had apparently entered the contest with the hope of winning a blouse and a scarf.
The performer went on to appear in more than 50 movies, making her official screen debut in 1950.
She was nominated for an Oscar for her lead role in The Unsinkable Molly Brown, while her other notable roles included The Tender Trap and, later in her career, as Liberace's mother in Behind The Candelabra (2013).
Reynolds also established a collection of Hollywood memorabilia containing hundreds of items, which was displayed at her Las Vegas hotel before being sold off to private collectors three years ago.
Anticipating retirement in 1979, she also opened a facility in Hollywood where performers could rehearse in comfort, which has been used by Cher, Michael Jackson and Johnny Depp.
But the performer continued working, stating in a 2011 interview that she intends to keep going until she "kicks it".
Other figures who have received SAG's lifetime achievement honour over the years include Rita Moreno, who collected the award earlier this year, Shirley Temple, Elizabeth Taylor and James Cagney.
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