Parton was among an eclectic group of new inductees that include rapper Eminem, crooner Harry Belafonte, rocker Pat Benatar, British band Duran Duran and pop singer, songwriter and producer Lionel Richie, among others.
Parton, 76, who is known for hits including Islands in the Stream and Jolene, asked last month that her name be withdrawn from consideration.
Scroll through the gallery below to see Dolly Parton's style evolution:
"Even though I'm extremely flattered and grateful to be nominated for the Rock and Roll Hall of Fame, I don't feel that I have earned that right," she said.
When the hall of fame rejected her rejection, in part because voting was already under way, Parton eventually relented.
The hall of fame said she was much more than a country star.
"With her trailblazing songwriting career, distinctive voice, campy glamour, business savvy and humanitarian work, Dolly Parton is a beloved icon who transcends the genre she transformed forever," the organisation said on its website as it announced the new members.
Country stars are not foreign to the Hall of Fame in Cleveland — Johnny Cash, Jimmie Rodgers and Chet Atkins are all among its ranks.
Other new inductees announced Wednesday include Carly Simon, the Eurythmics and Judas Priest.
In an interview last with National Public Radio, Parton said that after first saying no, she would "accept gracefully" if she were inducted to the hall of fame.
She said that it was always her belief that the organisation was for people in rock and roll.
"So I just felt like I would be taking away from someone that maybe deserved it, certainly more than me, because I never considered myself a rock artist," Parton said. "But obviously, there's more to it than that."
Acts can be inducted 25 years after their first commercial music release.
They are voted on by a body of more than 1,000 artists, music historians and industry veterans.
The new honourees will be formally inducted in a ceremony in Los Angeles on November 5.