The winner of the Man Booker International Prize, a brand-new laurel for the world's finest writers.
Kadare, 69, was honoured for the full body of his work, including such novels as "Broken April," "Spring Flowers, Spring Frost" and "The General of the Dead Army."
His prize-winning 1988 book "The Concert" was set against the backdrop of communist Albania's break with long-time patron China, while "The Pyramid" was set in ancient Egypt.
He reflected on his native Balkans in "Elegy for Kosovo," published in 2000, a year after NATO went to war against Slobodan Milosevic's Yugoslavia to end Serbian repression in the predominantly ethnic Albanian province.
"Ismail Kadare is a writer who maps a whole culture -- its history, its passion, its folklore, its politics, its disasters," said John Carey, the British literary critic who led the panel of three judges.
"He is a universal writer in a tradition of story-telling that goes back to Homer."
In a statement released in London by the Man Booker organisers, Kadare -- who fled to France in 1990 as a refugee before the collapse of dictator Enver Hoxha's communist regime -- said: "I feel deeply honoured."
"I am a writer from the Balkan fringe, a part of Europe which has long been notorious exclusively for news of human wickedness -- armed conflicts, civil wars, ethnic cleansing, and so on," he said.
"My firm hope is that European and world opinion may henceforth realise that this region, to which my country, Albania, belongs, can also give rise to other kinds of news and be the home of other kinds of achievement, in the field of the arts, literature and civilisation."
"I would like to take the prize that I have been awarded as confirmation that my confidence and my hopes have not been misplaced."
The Man Booker International Prize, awarded for the first time this year, seeks to recognise a living author from anywhere in the world "who has contributed significantly to world literature".
It is a spin-off from the Man Booker Prize that is awarded every October for the best work of fiction by a British, Irish or Commonwealth author, won this year by Alan Hollinghurst for "The Line of Beauty."
Kadare is to receive his prize of 60,000 pounds (88,800 euros, 109,000 dollars) plus a trophy at a ceremony in Scotland's capital Edinburgh on June 27, with an extra 15,000 pounds for a translator of his choice.
Eighteen other authors were shortlisted for the honour, including the late Saul Bellow, Germany's Gunter Grass, Czech-born Milan Kundera, Egypt's Naguib Mahfouz, US writers Philip Roth and John Updike, and Canada's Margaret Atwood.
Kadare, who now divides his time between France and Albania, has two books forthcoming -- "The Successor," due out in January next year, and "Agamemnon's Daughter," with a publication date yet to be announced.