The announcement of the decision taken by the Modi government came ahead of the birthday of Vajpayee, who turns 90, and the 153rd birth anniversary of Malviya on Thursday.
"The President has been pleased to award Bharat Ratna to Pandit Madan Mohan Malviya (posthumously) and to Atal Bihari Vajpayee," a Rashtrapati Bhavan press communiqué said.
With today's decision, the number of those bestowed with the Bharat Ratna award goes up to 45. Last year, cricketer Sachin Tendulkar and scientist C N R Rao were chosen for the honour.
The first BJP Prime Minister who was in office between 1998 and 2004, Vajpayee has faded from public life due to age-related illness. He is lauded as a statesman and the moderate face of BJP whose respect for political adversaries was a striking feature of his personality.
As prime minister, he has been credited with conceiving the golden quadrilateral infrastructure project and was praised for his bold peace initiative with Pakistan.
India's longest serving prime minister outside Congress party, Vajpayee's detractors called him the "mask" of RSS but still they always had good words for him.
Prime Minister Narendra Modi said the conferment of Bharat Ratna on Malviya and Vajpayee was a "fitting recognition" of the services of the "illustrious stalwarts" to the nation.
Describing Vajpayee as one of the greatest communicators that India has ever seen, Union Minister Arun Jaitley said he made his presence felt at the national level and was committed to peace in Southeast Asia.
The Presidential announcement was also greeted across the political divide with Congress, West Bengal Chief Minister Mamata Banerjee and Janata Dal-United leader Nitish Kumar, who were ministers in his cabinet, welcoming the award.
However, Congress hoped that the Modi government would follow the 'raj dharma' (duty of the rulers) and secularism. This was an apparent reference to Vajpayee's advice to Modi in the aftermath of the 2002 post-Godhra riots.
The other awardee Malviya was a multifaceted personality. He was an educationist who founded the Banaras Hindu University and became one of the torchbearers of the freedom struggle acting as a bridge between the Moderates and the Extremists.
Known for his espousal of Hindu nationalism- being one of the initial leaders of the far -right Hindu Mahasabha - Malviya was a social reformer and a successful Parliamentarian.
Born on December 25, 1861, Malviya was catapulted into the political arena immediately after his moving speech at the second Congress session held in Kolkata in 1886. He was President of INC in 1909 and 1918.
The recommendation for Bharat Ratna is made by the prime minister himself to the President. No formal recommendation for this is necessary.
Last year, when the UPA government had announced Bharat Ratna for Tendulkar and Rao, the BJP had criticised Congress for ignoring Vajpayee's contribution to the nation.
Some of the prominent personalities who were chosen for the honour included C Rajagopalachari, Dr Sarvepalli Radhakrishnan, C V Raman, Jawaharlal Nehru, Mother Teresa, Lata Mangeshkar, Jaya Prakash Narain and J R D Tata.
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