European Parliament President Jerzy Buzek said the five laureates symbolized the struggle for change in their countries.
"This year's winners symbolize the struggle for dignity, for democracy, and for human rights, and [they] are co-authors of historical change in the Arab world," Buzek said.
They are Mohammed Bouazizi from Tunisia, whose death after he set himself on fire triggered the chain of popular uprisings in North Africa that became known as the Arab Spring; Asmaa Mahfouz from Egypt, Ahmed al-Zubair Ahmed al-Sanusi from Libya, and Razan Zeitouneh and Ali Farzat, both from Syria.
Dzmitry Bandarenka from Belarus and a Colombian peasant farmers' community were the other two finalists.
Dzmitry Bandarenka is a Belarusian civil activist and member of the Belarusian Association of Journalists. He is one of the co-founders of the Charter '97 civil rights initiative.
The San Jose de Apartado Peace Community is recognized for its dedication to the values of peace and justice in a country plagued by decades of civil war and conflict.
The Sakharov Prize is named in honor of Soviet physicist and dissident Andrei Sakharov.
It has been awarded by the European Parliament since 1988 to individuals or organizations that have made a significant contribution to the struggle for human rights and democracy.
It carries an award of a total of 50,000 euros ($70,000).
Past winners of the prize include antiapartheid icon Nelson Mandela and former UN Secretary-General Kofi Annan.
with agency reports