Barber, who is the founder of the London-based studio Peter Barber Architects, was hailed by the jury for his work in social and affordable housing.
The Soane Medal is an annual award bestowed by the Sir John Soane's Museum to "encourage a better understanding of the central importance of architecture in culture and society".
It was established in 2017 in honour of its former owner, regency-era architect John Soane, and recognises architects, educators and critics in the field.
"I am so thrilled to have been awarded this year's Soane Medal," Barber said, ahead of the prize-giving at the museum this evening.
"Soane was an inventive architect, and I hope that we continue to build on his legacy of experimenting with classical ideas and styles. At a time of such uncertainty, it's really great to see social housing centre stage."
Barber studied to become an architect in the late 1970s and began his career working for the late architect Richard Rogers and the architecture studio Jestico + Whiles.
His first solo project was a house in Saudi Arabia, which led him to be commissioned for the Donnybrook Quarter housing scheme – Peter Barber Architects' breakthrough project.
Since it was founded in 2001, his studio has created projects on tricky and neglected sites across London, with standout examples including the Mount Pleasant hostel for homeless people and the addition of 15 homes added to the post-war Kiln Place.
Elsewhere in London, his studio recently completed the McGrath Road affordable housing scheme that won the RIBA Neave Brown Award for Housing 2021.
Alongside his completed projects, Barber is a lecturer at the University of Westminster and develops conceptual projects that address various issues including the housing crisis.
In 2021, he was awarded an Order of the British Empire (OBE) for his services to architecture.
London mayor Sadiq Khan said Barber's work is contributing to building "a better London for everyone".
"The philosophy underpinning Barber's architecture is the notion that the street is the building block of a city – he isn't just designing homes but designing London as well," Khan said.
"His work compliments our efforts to build a better London for everyone – a city that is fairer, greener, safer and more prosperous for all our communities.”
Barber was selected for the 2022 Soane Medal by a jury chaired by architect David Chipperfield, a former trustee of the Sir John Soane's Museum.
The jury also included design critic Alice Rawsthorn, who claimed that Barber "has designed new affordable homes where no one else could be bothered to build, reinventing historic typologies of working-class British housing".
"Housing is a major problem of our time," explained Rawsthorn. "Peter has devoted his life to resolving this crisis with dedication, ingenuity and aplomb," she continued.
"All of his work is motivated by his determination to help people to live safely, comfortably, productively and with dignity, making him a very worthy Soane Medallist.”