Hungarian writer Laszlo Krasznahorkai, whose surreal and anarchic novels combine a bleak worldview with mordant humour, won the Nobel Prize in literature for work the judges say upholds the power of art in the midst of "apocalyptic terror".

The Nobel judges said the 71-year-old author, whose novels sometimes consist of just one long sentence, is "a great epic writer" whose work "is characterised by absurdism and grotesque excess".

He's the first Nobel literature winner from Hungary since Imre Kertesz in 2002 and joins a list of laureates that includes Ernest Hemingway, Toni Morrison and Kazuo Ishiguro.

"I am calm and very nervous," Krasznahorkai told Radio Sweden after getting news of the prize, which comes with an award of more than $US1 million ($A1.5 million).

"This is the first day

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