To a hushed throng of reporters, Peter Englund, the permanent secretary of the Swedish Academy made the announcement.
"The Nobel Prize in literature for 2009 is awarded to the German author Herta Mueller, who with the concentration of poetry and the frankness of prose depicts the landscape of the dispossessed," he said.
A member of Romania's ethnic German minority, Mueller knew persecution under the rule of the Ceausescu regime. Her work, which was censored by the then communist government in Romania was smuggled into Germany where it received rave reviews.
Eventually in 1987, she emigrated to Germany with her husband.
Her writing of the harshness of life in a small, German-speaking Romanian village spoke of corruption and repression and her fight for free speech.
Peter Englund calls Mueller a truly phenomenal writer.
"All Nobel Prize laureates are of course special. I think it is a combination of a very, very distinct special language on one hand and then on the other, she has really a story to tell about growing up in a dictatorship but also growing up as a minority in another country and also growing up sort of a stranger for your own family. It is a very strong; very, very strong story to tell," he said.
The 56-year-old writer is said to be overjoyed with winning the prize.
Some say the award this year also represents a nod to the 20th anniversary of communism's collapse in Europe.
Mueller is the third European in a row to win the prize and the 10th German to take it. She is also the 12th woman to capture the top literature award.
The writer also collects a prize of $1.4 million from the Nobel committee.