Before attending the ceremony, the I, Daniel Blake director met film making students and academics from the University, discussing his career and experience of more than 50 years within the industry and passed on advice to the budding film makers.
Upon collecting his award, Ken said: "It's very kind of the University - it's probably a better degree than the one I actually got, which was a rather poor third so it's an improvement on that!
"Meeting people at the start of their working life is always quite touching because you can see their hope and apprehension and you can't help but wish them all the best."
MA Film Making student Emily Howes, who graduated in the same ceremony as Ken, said: "It was great to have the opportunity to meet Ken in such an intimate setting and to have the chance to chat to him. He was very humble and it was a lovely experience to have. It was great to learn how he works with actors and the casting team when developing his films."
Addressing the faculty of Arts, Computing, Engineering and Science at the ceremony in Sheffield City Hall, he said: "The world today is very different from when I graduated. Those graduating today face a difficult unstable world with challenges and insecurity ahead caused by previous generations."
"My advice to film students is for them to do the rubbish projects when starting out. Don't spend a year trying to find the perfect film. Learn the craft on those jobs and the good jobs will follow. But it's not a career for the fainthearted."
Ken is one of Britain's foremost filmmakers, with a career spanning more than half a century. One of his most well remembered films, Kes, tells the story of a troubled boy from South Yorkshire and his kestrel, and is based on the novel A Kestrel for a Knave by Barry Hines.
Ken's latest film, I, Daniel Blake, has received immense critical acclaim for its portrayal of a disabled man struggling with the welfare state and was recently referenced in Prime Minister's Questions in Parliament alongside research by Hallam's Centre for Regional Economic and Social Research (CRESR).