This is the decision that was passed on Thursday by Khalk Maslakhaty (People's Council), which held its 12th session in the eastern city of Turkmenabad, formerly Chardzhou.
Niyazov initially rejected the honor, but after a long ovation, he accepted the council's decision.
The session also decided to give the president three degrees of the Altyn-Asyr (Golden Age) order, one of the highest honors in the country.
A law passed in December 1999 set no limit to Niyazov's rule.
The session was attended by over 2,000 delegates. Under the Constitution, the council includes the president, parliament members, elected representatives of populated areas, Cabinet members, heads of local executive bodies, judges and representatives of NGOs.
The council's decision are binding for all state officials.