The academy said Heaney, born in Northern Ireland but living in Dublin, was awarded the $1 million prize for works "which exalt everyday miracles and the living past."
In London, Heaney's publisher said the poet was now on holiday in Greece and probably did not know he had won.
"He is on a rural holiday in Greece -- we do not know how to reach him," said a spokeswoman at Faber & Faber Ltd.
"We are hoping that he will ring us as soon as he finds out," she added.
Trinidadian Derek Walcott was the last poet to win the prize in 1992.
Heaney, the third Irishman to take the world's most prestigious literary award after William Butler Yeats won it in 1923 and Samuel Beckett won in 1969, left Northern Ireland in 1972 and has now lived in Dublin for almost 20 years.
The academy said Heaney had spoken out as an Irish Catholic about violence in British-ruled Northern Ireland.
"In his opinion, the fact that there has been unwillingness on both sides to speak out -- even about manifest injustices -- has been of great importance in the explosive development [in Northern Ireland]," the Swedish academy said.
Heaney is a rarity among poets, having achieved acclaim from critics while producing best-sellers.
It once took him three hours just to walk down Dublin's main street as autograph hunters and fans followed him.
In his native Northern Ireland, many were jubilant at the international recognition given to the local boy.
Father John Walsh, president of the Catholic boys' school Heaney attended in Londonderry, called the award "a well-deserved honor. It is also an honor for the school and the county and it is an honor for the country."
Down at Scruffy Murphy's, however, one of the poet's favorite pubs in his early days, the drinkers said they were delighted by the news but had not read much of his poetry.
"I used to know when he drank. He was a lovely. Like a lot of poets, he liked a pint of stout," said Michael Bourke, former manager of the pub.
"I didn't realize he was in the big league," he added.
The Swedish academy said Heaney, born on a farm in Mossbawn, County Derry in Northern Ireland in 1939, had concluded in essays that "the task of the poet is to ensure the survival of beauty, especially in times when tyrannical regimes threaten to destroy it."
A member of the Irish Academy of Letters and one of the foremost poets writing in English today, Heaney is a tousle-haired figure with a shy and subtle manner.
He abhors media hype and publishers' publicity caravans.
He prefers to let his poems do the talking, nostalgically recalling the sights and smells of a country childhood, revelling in the recurring images of Irish potato diggers and peat-bog cutters.
Fourteen slim volumes of poetry have given him an international reputation and led to appointments as Professor of Poetry at Oxford University in England and lecturer at Harvard University in the United States.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.