Based in Britain, Gurnah is the first African writer to win the award since the Zimbabwean Doris Lessing in 2007, and only the second writer of colour from sub-Saharan Africa, after Nigeria's Wole Soyinka, who won in 1986.
His novels include "Paradise", which is set in colonial East Africa during the First World War and was shortlisted for the Booker Prize for Fiction, and "Desertion".
Gurnah left Africa as a refugee in the 1960s amid the persecution of citizens of Arab origin in Zanzibar where he grew up when the peaceful liberation from British colonial rule led to a revolution.
The prize is awarded by the Swedish Academy and is worth 10 million Swedish crowns ($1.14 million).
The prizes, for achievements in science, literature and peace, were created through a bequest in the will of Swedish dynamite inventor and wealthy businessman Alfred Nobel. They have been awarded since 1901, with the final prize in the line-up - economics - a later addition.
Past literature winners have primarily been novelists such as Ernest Hemingway, Gabriel Garcia Marquez and Toni Morrison, poets such as Pablo Neruda, Joseph Brodsky and Rabindranath Tagore, or playwrights such as Harold Pinter and Eugene O'Neill.
Beyond the prize money and prestige, the Nobel literature award generates a vast amount of attention for the winning author, often spurring book sales and introducing less well-known winners to a broader international public.