He is the first player to be honored by the Davey O'Brien Foundation as a collegian and following a professional career.
The 2016 Davey O'Brien award winner is national champion Clemson quarterback Deshaun Watson, who repeated.
The Legends Award that McMahon will receive in February was established in 2001 to commemorate the 25th anniversary of the foundation by recognizing a quarterback who has made "significant contributions to the game of football on and off the field."
McMahon was a two-time All-American at BYU (1980 and 1981) before being selected No. 5 overall in the 1982 NFL Draft by the Chicago Bears. He played in 119 NFL games for the Bears, Chargers Eagles, Vikings, Cardinals and Packers.
At BYU, McMahon passed for 9,536 yards and 84 touchdowns and broke 75 NCAA records.
After earning his bachelor's degree in communications, McMahon was inducted into the BYU Athletics Hall of Fame in 2014. His No. 9 jersey was retired that same year.
The award ceremony is Monday, Feb. 20 at the Fort Worth (Texas) Club. Call 817-338-3488 for tickets or more information.