The annual October meeting at Royal Randwick will also see a new Aus$5 million King Charles III Stakes to be run on the same day after winning endorsement from the British monarch.
"The King Charles III Stakes creates a new level of excitement for the Sydney Everest Carnival with a feature open age mile (1,600m) race boosting an already mouth-watering Everest Day meeting," Racing NSW chairman Russell Balding said in a statement.
"At $20 million of prize-money The Everest is now the second richest race in the world and the richest race on turf."
Only the Saudi Cup, which is held on dirt, carries more money.
The Everest - which is raced over 1,200 metres (3/4 mile, or six furlongs) and had a previous purse of Aus$15 million - has now surpassed the Pegasus World Cup, also on dirt, in the United States.
Racing NSW chief executive Peter V'landys told the Sydney Morning Herald that King Charles III personally endorsed having the new Group I race named in his honour.
"The King was very chuffed that we have named a feature race after him on Everest Day," he said, after meeting the monarch at Royal Ascot last week.
"I'm very confident after talking to him that he will come to the race in the next few years."
The Everest, won last year by outsider Giga Kick, ridden by veteran Craig Williams, will be held on October 14.
