The organisation has been asking listeners choose a musical recipient for an official Blue Plaque in each BBC Local Radio station area.
BBC Radio Northampton has decided to honour former Fairport Convention singer SandyDenny by placing a plaque at Byfield Village Hall.
The singer played her final gig there on April 1, 1978, only four weeks before her death at the age of 31.
Assistant editor at BBC Radio Northampton, Marsha Ramroop, said: “Sandy Denny was one of the UKs most iconic folk singers with a sublime voice.
"She played her last ever gig in here in Northamptonshire, where she settled and wrote many songs in her barn. She still has a following and inspires music in others. It’s a real privilege to be honouring a true music legend.”
The honorary plaque was unveiled by Bob Stanley of the band Saint Etienne as part of BBC Music Day, which saw 47 of the plaques installed aroud the UK.
Sandy, whose full name was Alexandra Elene MacLean, grew up in London and started her started her career with The Strawbs.
She joined Fairport Convention in 1968 to record the band's biggest album Leige and Lief, before going on to form Fotheringay and later rejoining Fairport with her husband Trevor Lucas.
The final list of places to receive a blue plaque was whittled down from BBC local radio listeners’ ideas and those from a committee made up of music industry experts and BBC representatives.
Controller of BBC English regions David Holdsworth, said: “It is hugely prestigious to receive a British Plaque Trust Blue Plaque, usually only around two are awarded each year.
"To mark BBC Music Day across BBC local radio with 47 blue plaques is a fitting way to commemorate our listeners’ passion and pride for where they live and to celebrate our musical heritage.”