The announcement came Wednesday in Pasadena at the Tournament House. Khan came out to talk about her excitement to participate in the 130th Rose Parade.
"This is something so new and different for me...To think that I would ever be a part of something like this - who knew? I hope you like me. At any rate, we're going to have fun," she said.
She went on to say that she was a "little bit scared" to be the grand marshal.
"But fear is for me has always been a good thing. If I'm scared of something, or if something scares me a wee bit, I'm all about it. I go to conquer," she said.
The theme is "The Melody of Life," which celebrates the universal language of music and how it brings people together.
Khan will also participate in the pre-game celebration at the 105th Rose Bowl game.
The game and parade will be held Jan. 1.