The announcement was made on Friday by the Norwegian Nobel Committee.
The International Atomic Energy Agency (IAEA) and ElBaradei, an Egyptian, were picked from a record field of 199 candidates for their efforts to limit the spread of atomic weapons.
It praised ElBaradei as an "unafraid advocate" of measures to strengthen non-proliferation efforts and honoured the IAEA's work to "prevent nuclear energy from being used for military purposes and to ensure that nuclear energy for peaceful purposes is used in the safest possible way," the committee said in its citation.
The two had been among favourites for the award on the 60th anniversary of the US atomic bombings of the Japanese cities of Hiroshima and Nagasaki in August 1945.
"At a time when disarmament efforts appear deadlocked, when there is a danger that nuclear arms will spread both to states and to terrorist groups, and when nuclear power again appears to be playing an increasingly significant role, IAEA's work is of incalculable importance," the committee said.
The prize, named after Swedish philanthropist Alfred Nobel, is worth $1.3 million and is due to be handed out in Oslo on 10 December.