The award, named after Denmark's famous fairytale creator H.C. Andersen, comes with a cheque for 500,000 kroner (67,000 euros, $71,400).
The jury honoured Murakami's "bold mix of classic narrative, pop culture, Japanese tradition, dreamlike realism and philosophical debate."
The 66-year-old, whose books have sold in the millions, has a cult following for his intricately-crafted tales of the absurdity and loneliness of modern life, and peppers his work with references to pop culture.
With works including 'Kafka on the Shore' and 'Norwegian Wood', he has repeatedly been tipped as a future Nobel laureate and has already received a number of other awards, including the Franz Kafka prize in 2006.
The prize-giving is due to take place in Odense, Andersen's hometown, in October 2016.
It has previously been awarded to Paolo Coehlo in 2007, J.K. Rowling in 2010, Isabel Allende in 2012 and Salman Rushdie in 2014.