Making the announcement, Peter Englund, permanent secretary of the Swedish Academy, called her a "master of the contemporary short story".
The 82-year-old, whose books include Dear Life and Dance of the Happy Shades, is only the 13th woman to win the prize since its inception in 1901.
"I knew I was in the running, yes, but I never thought I would win," Munro told Canadian media.
Presented by the Nobel Foundation, the award - which is presented to a living writer - is worth eight million kronor (£770,000).
Munro said in an interview that Dear Life would "probably" be her last book
Previous winners include literary giants such as Rudyard Kipling, Toni Morrison and Ernest Hemingway.
Mr Englund told The Associated Press that he had not been able to contact Munro ahead of the announcement so left a message on her answering machine, informing her of her win.
"She has taken an art form, the short story, which has tended to come a little bit in the shadow behind the novel, and she has cultivated it almost to perfection,'' he added.
Munro, who began writing in her teenage years, published her first story, The Dimensions of a Shadow, in 1950.
She had been studying English at the University of Western Ontario at the time.
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