Some 6.6 million children around the world voted to award the prestigious prize to Somaly Mam, herself a former sex slave, said the Swedish organization bearing the same name as the prize.
"Somaly Mam is being recognized for her long and often dangerous struggle to save the girls who are sold as slaves to and at brothels in Cambodia," the group said in a statement.
Through her organization AFESIP, Mam has built three safe houses for girls rescued from sex slavery where they receive food, healthcare and an education or job training, according to the statement.
"Three thousand girls who have been slaves now have a better life thanks to Somaly," it said, adding that her work had earned her regular death threats and even an attack two years ago on her 14-year-old daughter, who "was kidnapped, raped and sold to a brothel."
The World's Children's Honourary Award was meanwhile jointly awarded to Josefina Condori, an activist for the rights of girls who work as maids in Peru, "often in slave-like conditions," and Agnes Stevens, for her work with homeless children in the United States.
The three laureates will receive a total of $150,000, half of which will go to Mam, while Condori and Stevens will split the remaining $75,000.
They will receive their awards from Sweden's Queen Silvia at a prize ceremony on Friday.