The Lifetime Achievement Medal will go to Czech-born architect Eva Jiřičná, while designer and MIT professor Neri Oxman will be given the Design Innovation Medal. The Emerging Design Medal will be awarded to fashion designer Grace Wales Bonner.
The Panerai London Design >Medal is the most prestigious of the four medals. It honours designers who are making, or have made, a significant difference to people's lives through their innovation, originality and imagination. Previous recipients include Marc Newson, Thomas Heatherwick and David Adjaye.
Chalayan receives it in recognition of his experimental and intellectual approach to designing clothes, with previous projects including dresses impregnated with lasers, two-in-one garments and coffee tables that morph into skirts.
Born in Cyprus, Chalayan was educated at London's Central Saint Martins, before setting up his own label in 1994.
He has collaborated with a range of high-profile figures, including Lady Gaga, Frank Gehry, Azzedine Alaïa and Moritz Waldemeyer.
Eva Jiřičná, who has been based in London for 50 years, is honoured for a career portfolio that includes the interior design of the Lloyds of London building, completed while working for the Richard Rogers Partnership.
Her other projects include the home of fashion designer Joseph Ettedgui, as well as many of his Joseph stores, and a convention centre in Zlín, Czech Republic.
Neri Oxman is awarded for a range of design innovations created by her Mediated Matter Group at MIT, from 3D-printed death masks to architecture that replicates the techniques of silkworms, while Grace Wales Bonner is recognised for her menswear that challenges race and gender stereotypes.
The medals will be presented with the award at a ceremony at the Queen Elizabeth Hall at London's Southbank Centre on 17 September.
An exhibition of the four winners' work will be on display at the V&A museum from 15 to 23 September, to coincide with London Design Festival 2018.