The Academy said Carson was honoured for her work that engages playfully with the classical tradition while creating new forms for contemporary literature.
The Nobel Prize in Literature is awarded by the Swedish Academy and carries a prize of 12 million Swedish crowns, worth about $1.2 million.
Carson, a poet, essayist and translator, is known for blending verse, prose, dialogue and translation in works that often cross traditional literary boundaries. Her writing has been strongly influenced by classical Greek literature.
Her work spans several forms, including opera libretti, literary criticism and verse novels. One of her best-known works is Autobiography of Red, published in 1998.
Carson's 2019 performance piece Norma Jeane Baker of Troy also reflects her distinctive approach. The work combines the story of Helen of Troy from Euripides' play Helen with the life and image of American actress Marilyn Monroe.
With the award, Carson joins the ranks of major literary figures including Alexander Solzhenitsyn, Alice Munro and Ernest Hemingway.
The Nobel Prize in Literature has also faced criticism over the years, with the Swedish Academy accused of overlooking major writers including Leo Tolstoy, Virginia Woolf and Jorge Luis Borges. The Academy has also faced criticism over its selection of US writers, although it awarded the prize to singer-songwriter Bob Dylan in 2016.
Supporters of the Academy argue that the prize has also recognised widely celebrated authors, including Colombia's Gabriel Garcia Marquez in 1982 and Doris Lessing in 2007, while bringing attention to lesser-known literary traditions.
The Nobel Prizes in literature, science and peace were established under the will of Swedish inventor and businessman Alfred Nobel and have been awarded since 1901.
Last year's Nobel Prize in Literature was awarded to Hungarian writer Laszlo Krasznahorkai, who was described by American critic Susan Sontag as a master of the apocalypse.
