The prize, one of the largest in the world of classical music, is given every three or four years to recognize the achievements of an active artist in the field.
Stemme was honoured “for her interpretations of the dramatic soprano repertoire with her respect for the composer's intentations, her tireless dedication to the dramatic soprano repertoire, and for being a great Wagnerian soprano of today”, the jury said in a statement.
The Birgit Nilsson Prize was founded by the singer herself before she died in 2005 aged 87 with hopes of inspiring young artists to reach their full potential.
One of the greatest Wagnerian sopranos of the 20th century, Nilsson, the daughter of a Swedish farmer, made her breakthrough at Milan's legendary La Scala as the cold Princess Turandot in 1958.
“It is a great honour to be recognized for my work, but it is even greater to be recognized in my home country by a world-renowned organization that bears the name and carries the legacy of a legend… my idol Birgit Nilsson,” Stemme, who is the fourth to win the prize, said in a statement.
Nina Stemme. Photo: Jonas Ekströmer/TT
The 55-year-old performed as Isolde twice (2005 and 2006) in Richard Wagner's opera 'Tristan und Isolde' at the Bayreuth Festival in Germany and also appeared in Giacomo Puccini's 'Turandot' and in Richard Strauss' 'Elektra'.
In 2013, she won the International Opera Award for the Best Female Singer.
Previous laureates include Spain's Placido Domingo (2009), his Italian counterpart Riccardo Muti (2011) and the Vienna Philharmonic (2014).
Stemme will receive her award in the presence of King Carl XVI Gustaf and Queen Silvia at an October 11th ceremony in Stockholm.
The prize jury includes Wagner's great-granddaughter Eva Wagner-Pasquier, who is also the former co-director of the Bayreuth Festival, and former president of the Vienna Philharmonic, Clemens Hellsberg.