The Nobel Prize in Literature was on Thursday awarded to Laszlo Krasznahorkai, considered by many as Hungary's most important living author whose works explore themes of postmodern dystopia and melancholy.

The Swedish Academy honoured him "for his compelling and visionary oeuvre that, in the midst of apocalyptic terror, reaffirms the power of art."

Krasznahorkai, 71, is "a great epic writer in the Central European tradition that extends through Kafka to Thomas Bernhard, and is characterised by absurdism and grotesque excess," the jury said in a statement.

"But there are more strings to his bow, and he also looks to the East in adopting a more contemplative, finely calibrated tone."

Krasznahorkai will receive the award in Stockholm on December 10, the anniversary of the 1896 death of scientist and prize creator Alfred Nobel.

Last year, the award went to South Korean author Han Kang, the first Asian woman to win the Nobel. (AFP)