The committee said the EU had helped to transform Europe from a continent of war to a continent of peace.
The award comes as the EU faces the biggest crisis of its history, with recession and social unrest rocking many of its member states.
The last organisation to be given the award outright was Medecins Sans Frontieres, which won in 1999.
Announcing the award, Nobel committee president Thorbjoern Jagland acknowledged the EU’s current financial problems and social unrest.
But he said the committee wanted to concentrate on the body’s work over six decades of advancing “peace and reconciliation, democracy and human rights”.
The committee president highlighted the EU’s work in sealing the reconciliation between France and Germany in the decades after World War II.
And he praised the organisation for incorporating Spain, Portugal and Greece after their authoritarian regimes collapsed in the 1970s.
He said that the EU’s reconciliation work had now moved to Balkan countries, and pointed out that Croatia was on the verge of membership.
Reacting to the award, EU Commission President Jose Manuel Barroso said on his Twitter feed: “It is a great honour for the whole of the EU, all 500 million citizens, to be awarded the 2012 Nobel Peace prize.”