The committee praised the 27-nation EU for reconciling the continent after World War Two and for its role in spreading stability to former communist countries after the 1989 fall of the Berlin Wall.
“In the inter-war years, the Norwegian Nobel Committee made several awards to persons who were seeking reconciliation between Germany and France. Since 1945, that reconciliation has become a reality," the Nobel Peace Prize Committee said in a statement.
"Today war between Germany and France is unthinkable. This shows how, through well-aimed efforts and by building up mutual confidence, historical enemies can become close partners,” the statement went on.
European Council President Herman Van Rompuy said that the Nobel accolade recognised the bloc's role as the "biggest peacemaker in history" while EU Commission chief José Manuel Barroso hailed it as "a great honour for the whole of the EU, all 500 million citizens."
But the announcement also quickly drew spirited reactions from EU commentators and bloggers, who mused about who should go to pick up the prize in Oslo.
"I’ve no idea who will go to get the prize – will it be Barroso, Van Rompuy, Schulz, Ashton, Reding, Fuele, Piebalgs, Georgieva or all of them," commented EurActiv's senior editor Georgi Gotev on his blog Reuniting Europe.
Jean Quatremer, the correspondent of French daily Libération, tweeted that "instead of boring Barroso and Van Rompuy", an ordinary EU citizen should go to Oslo to collect the prize.
The five-person Nobel Peace Prize committee includes one bishop, a lawyer, and politicians such as the committee chair, Thorbjørn Jagland, a former Norwegian foreign minister and current secretary-general of the Council of Europe.
Its announcement said that the integration of Greece, Spain and Portugal in the 1980's, the admission of Croatia as a full member in 2013, and the accession talks currently underway with Montenegro, Serbia and other Balkan countries all bore testimony to the bloc's role in promoting reconciliation.
"The stabilising part played by the EU has helped to transform most of Europe from a continent of war to a continent of peace,” the statement said, referring to Alfred Nobel's vision of promoting "peace congresses".
The Nobel Committee recognised the deep challenges now facing the EU as it struggles to emerge from a sovereign debt crisis that has forced public-funded bailouts for Greece, Ireland and Portugal, and which now threatens to engulf Spain.
The EU is currently undergoing grave economic difficulties and considerable social unrest, according to the Nobel Committee. Their announcement expressed a wish to focus on "the EU's most important result: the successful struggle for peace and reconciliation and for democracy and human rights".
The prize, worth one million euro, will be presented in Oslo on 10 December.