Lopez, who has sold over 80 million records worldwide till date, will also perform at the show live for the first time since 2001.
She is also nominated for two Video Music Awards - Best Collaboration and Best Latin Video - for her most recent single, "Dinero."
Previous Vanguard winners include Jackson himself, Madonna, Britney Spears, Justin Timberlake, Beyonce, Kanye West, Rihanna, P!nk and rock band Guns N' Roses.
Lopez, 49, also appeared in MTV's Facebook Live segment and said felt "amazing" about the honour. "I grew up on MTV and watching all my idols get this award. Being the recipient is like - I can't even believe it. I'm so excited," she said.
This will be Lopez's third VMA trophy. She previously won Best Dance Video "Waiting for Tonight" in 2000, and Best Hip-Hop Video "I'm Real" in 2002. The 2018 MTV Video Music Awards will be held on August 20.