The award -- replacing the ShortList Prize -- will go to the best album that sold fewer than 500,000 U.S. copies.
The finalists include Animal Collective's "Feels"; Antony and the Johnsons' "I Am a Bird Now"; Fiona Apple's "Extraordinary Machine"; the Arcade Fire's "Funeral"; and Bloc Party's "Silent Alarm," Billboard.com announced.
Also on the list are Death Cab for Cutie's "Plans"; the Decemberists' "Picaresque"; Kings of Leon's "Aha Shake Heartbreak"; M.I.A.'s "Arular"; and Sufjan Stevens' "Illinois."
The finalists were chosen by a panel including Elton John, Elijah Wood, Beck, Margaret Cho, John Legend, Death Cab for Cutie's Ben Gibbard, Keith Urban, Ric Ocasek, Shirley Manson, Linkin Park's Chester Bennington and Mike Shinoda, Suzanne Vega and Dave Matthews.
The winner will be announced Feb. 6 in Los Angeles.