ICAN won the Nobel Peace Prize for its decade-long campaign to rid the world of the atomic bomb as nuclear-fuelled crises swirl over North Korea and Iran.
The nuclear disarmament group was named as the winner on Friday morning in Oslo, Norway.
"The organisation is receiving the award for its work to draw attention to the catastrophic humanitarian consequences of any use of nuclear weapons and for its ground-breaking efforts to achieve a treaty-based prohibition of such weapons," Norway's Nobel committee president Berit Reiss-Andersen said.
The world's nuclear powers must begin "serious negotiations" aimed at disarmament, Ms Reiss-Andersen said as she awarded the prestigious prize.
"This year's Peace Prize is also a call upon these states to initiate serious negotiations with a view to the gradual, balanced and carefully monitored elimination of the almost 15,000 nuclear weapons in the world," she said.
The head of ICAN said on Friday US President Donald Trump and North Korean leader Kim Jong Un should know that nuclear weapons were illegal.
Asked for her message to the two leaders, ICAN's Executive Director Beatrice Fihn told Reuters: "Nuclear weapons are illegal. Threatening to use nuclear weapons is illegal. Having nuclear weapons, possessing nuclear weapons, developing nuclear weapons, is illegal, and they need to stop."
More than 70 years since atomic bombs were used on the Japanese cities of Hiroshima and Nagasaki, and as tensions flare over the North Korean crisis, the Nobel committee sought to highlight ICAN's tireless efforts to rid the world of nuclear weapons.
A coalition of more than 300 NGOs founded in Vienna in 2007 on the fringes of an international conference on the nuclear non-proliferation treaty, ICAN has tirelessly mobilised campaigners and celebrities alike in its cause.
It was a key player in the adoption of a historic nuclear weapons ban treaty, signed by 122 countries in July. However, the accord was largely symbolic as none of the nine known world nuclear powers signed up to it.
The organisation will receive their prize, consisting of a gold medal, a diploma and a cheque for about $14. million at a ceremony in Oslo on December 10, the anniversary of the death in 1896 of the prize's creator, Swedish philanthropist and dynamite inventor Alfred Nobel.