Tokarczuk won "for a narrative imagination that with encyclopaedic passion represents the crossing of boundaries as a form of life," the Swedish Academy said on Thursday.
The 2018 prize was delayed by a year after a sexual assault scandal rocked the Academy, which gives out the award.
Tokarczuk wrote on social media: "Joy and emotion have left me speechless. Thank you very much for all the congratulations."
Polish Prime Minister Mateusz Morawiecki said: “This is fantastic news for Poland."
Meanwhile, Polish Culture Minister Piotr Gliński reacted by saying: “This is good news for Polish culture.”
The Nobel Prize in Literature for 2019 was awarded to Austrian author Peter Handke.
The last time a Pole won the Nobel literature prize was in 1996, when the award went to poet Wisława Szymborska.
Tokarczuk joins an elite list of previous Polish winners which comprises literary heavyweights Henryk Sienkiewicz (1905), Władysław Reymont (1924) and Czesław Miłosz (1980).
Tokarczuk’s work has won international praise from critics and has proved popular with the reading public.
The Swedish Academy said Tokarczuk’s "magnum opus" is her historical novel The Books of Jacob.
Meanwhile, her novel Drive Your Plow Over the Bones of the Dead has made the longlist for the 2019 National Book Award, one of the most prestigious literary prizes in the United States.
The novel, described by its American publisher Random House as a “thriller cum fairy tale,” has been nominated in the Translated Literature category along with nine other books by international authors.
First published in Poland in 2009, Tokarczuk’s murder mystery was adapted for the silver screen in 2017 by Polish filmmakers Agnieszka Holland and Kasia Adamik under the title Spoor.
Translated into English by Antonia Lloyd-Jones, the novel has garnered excellent reviews in the international press.
Earlier this year, Drive Your Plow Over the Bones of the Dead was shortlisted for, but failed to win, the Man Booker International Prize.
Tokarczuk won that prestigious award last year for her novel Flights.