Dr Ismaily has been chosen in recognition of his efforts in promoting economic relations and mutual understanding between Japan and Oman.
Dr Ismaily was one of the founders of the Japan International Cooperation Agency (JICA) Alumni Association and its first chairman.
He has also played a vital role in developing relations between Japan and Oman in the SME field, stated a press release.
The award ceremony will be held on Tuesday at the Imperial Palace in Tokyo, and the order will be conferred by Shinzo Abe, Prime Minister of Japan.
Dr Ismaily will be given an opportunity, along with other recipients, to have an audience with the Emperor of Japan.
The Order of the Rising Sun was first introduced in 1875. It is the first-ever order to be conferred by the Government of Japan.
It is one of the prestigious Japanese decorations that have been granted to non-Japanese nationals since 1981.
Economic relations between the sultanate and Japan have grown significantly especially during the last decades. This year marks the 45th anniversary of establishing diplomatic relations between Japan and Oman.