The novelist was praised by the Swedish Academy as a writer "who, in novels of great emotional force, has uncovered the abyss beneath our illusory sense of connection with the world".
His most famous novels The Remains of the Day and Never Let Me Go were adapted into highly acclaimed films. He was made an OBE in 1995.
The 62-year-old writer said the award was "flabbergastingly flattering".
He has written eight books, which have been translated into over 40 languages.
When contacted by the BBC, he admitted he hadn't been contacted by the Nobel committee and wasn't sure whether it was a hoax.
He said: "It's a magnificent honour, mainly because it means that I'm in the footsteps of the greatest authors that have lived, so that's a terrific commendation."