Peruvian Mario Vargas Llosa, one of the most acclaimed writers in the Spanish-speaking world, has been awarded the 2010 Nobel Prize for literature.
The Swedish Academy hailed "his cartography of structures of power" and "trenchant images of the individual's resistance, revolt, and defeat."
The 74-year-old has written more than 30 novels, plays and essays.
He is the first South American winner of the prize since 1982 when it went to Colombian Gabriel Garcia Marquez.
In the previous six years, the academy awarded the 10 million kronor (£938,000) prize to five Europeans and one Turk, sparking criticism that it was too Euro-centric.
The Swedish Academy's Peter Englund said Vargas Llosa was "a divinely gifted story-teller," whose writing touched the reader.
Mr Englund added that the writer was in New York and was told by telephone that he had won the prize.
Vargas Llosa is currently teaching at Princeton University.
"I will try to survive the Nobel Prize," he joked during a news conference later on Thursday. "It was a total surprise."
But he said the honour would not affect his craft. "I don't think the Nobel Prize will change my writing, my style, my themes," he said.
Previously, the author had told the BBC's Latin American service that "a writer shouldn't think about the Nobel prize as it is bad for one's writing".
Born in the town of Arequipa, Vargas Llosa took Spanish nationality in 1993 - three years after an unsuccessful bid for the Peruvian presidency.
The author had long been mentioned as a possible Nobel candidate - he has won some of the Western world's most prestigious literary medals including the Cervantes Prize in 1995 - the Spanish-speaking world's most distinguished literary honour.
His works have also been translated into 31 languages, including Chinese, Croatian, Hebrew and Arabic.
The writer's international breakthrough came with the 1960s novel The Time of The Hero which built on his experiences at the Peruvian military academy, Leoncio Prado.
The book was considered controversial in his homeland and 1,000 copies were burnt publicly by officers from the academy.
His best-known works include Conversation In The Cathedral, The War of the End of the World and The Feast of the Goat.
Several books were made into movies including the 1990 Hollywood film Tune in Tomorrow, based on his novel Aunt Julia and the Scriptwriter, which starred Barbara Hershey, Peter Falk and Keanu Reeves.
The author once had a great friendship with Colombian writer Gabriel Garcia Marquez, about whom he wrote his doctoral thesis in 1971.
But their relationship turned into one of literature's greatest feuds after Vargas Llosa punched Garcia Marquez at a theatre in Mexico City in 1976, leaving him with a black eye.
The pair have never disclosed the reason for their dispute, although witnesses have suggested they fell out over a conversation between Garcia Marquez and Vargas Llosa's wife.
In the intervening years, the authors fell out politically, too, with the Peruvian publicly criticising Garcia Marquez's friendship with Cuban leader Fidel Castro.
Relations appeared to thaw in 2007, however, when Vargas Llosa provided the foreword to the 40th anniversary edition of Garcia Marquez's classic work, A Hundred Years of Solitude.
After the Nobel announcement on Thursday, Garcia Marquez - himself a Nobel laureate - tweeted: "Cuentas iguales" ("Now we're even").