Transtromer, 80, received the award because "through his condensed, translucent images, he gives us fresh access to reality," the academy said in a release.
He began his writing career in 1954 when he published "17 dikter" (17 poems), considered one of the most acclaimed literary debuts of the decade, the academy said in its biography of the prizewinner.
Themes of nature and music dominate his work. He followed up "17 diker" with a number of collections in the 1950s and 1960s, including "Hemligheter pa vagen" ("Secrets Along the Way") in 1958, "Den halvfardiga himlen" ("The Half-finished Heaven") in 1962 and "Klanger och spar" ("Windows & Stones: Selected Poems") in 1966.
Transtromer was introduced in the United States by author Robert Bly in the 1960s and since then international interest in Transtromer's poetry has grown and his works have been translated into more than 60 languages.
In 1990, Transtromer suffered a stroke that greatly affected his ability to speak.