Ishiguro, author of novels including 'The Remains of the Day' and 'Never Let Me Go', was praised by the Swedish Academy for novels which "uncovered the abyss beneath our illusory sense of connection with the world" and were driven by a "great emotional force".
Despite being among those tipped for the prize, whose previous winners include Seamus Heaney, Toni Morrison, Doris Lessing and Pablo Neruda, Ishiguro said he had been completely unprepared for the announcement and had even doubted at first if it was true, theguardian.com reported.
"You'd think someone would tell me first but none of us had heard anything," said Ishiguro, who had been sitting at his kitchen table at home in Golders Green in London about to have brunch, when he got the call from his agent.
Ishiguro, who was born in Nagasaki, Japan but moved to the UK when he was five, said he was 'tremendously proud' to receive the award and emphasized how much he hoped it would be a force for good at a time of global instability.
"This is a very weird time in the world, we've sort of lost faith in our political system, we've lost faith in our leaders, we're not quite sure of our values, and I just hope that my winning the Nobel prize contributes something that engenders good will and peace," he said.
"It reminds us of how international the world is, and we all have to contribute things from our different corners of the world."
With names including Margaret Atwood, Ngugi Wa Thiong'o and Haruki Murakami leading the odds at the bookmakers, Ishiguro was a surprise choice and he admitted one of his first thoughts had jumped to fellow living authors he felt were equally deserving of a Nobel.
Ishiguro, who is currently 'very deep' into writing his latest novel, which he is juggling alongside film, theater and graphic novel projects, also expressed concern at the distracting burden of celebrity that the Nobel prize might bring and impact on his writing.
Ishiguro studied creative writing at the University of East Anglia, going on to publish his first novel, 'A Pale View of the Hills', in 1982. He has been a full-time writer ever since. According to the Academy, the themes of "memory, time and self-delusion" weave through his work, particularly in 'The Remains of the Day', which won Ishiguro the Booker prize in 1989 and was adapted into a film starring Anthony Hopkins as the 'duty-obsessed' butler Stevens.
Addressing Ishiguro's Nobel win, the former poet laureate Andrew Motion, said: "Ishiguro's imaginative world has the great virtue and value of being simultaneously highly individual and deeply familiar — a world of puzzlement, isolation, watchfulness, threat and wonder."
Motion asked, "How does he do it? Among other means, by resting his stories on founding principles which combine a very fastidious kind of reserve with equally vivid indications of emotional intensity. It's a remarkable and fascinating combination, and wonderful to see it recognized by the Nobel prize-givers."
The Nobel Prize for Literature comes with winnings of nine million Swedish krona (£832,000). Permanent secretary of the academy, Sara Danius, spoke to Ishiguro about his win around an hour after the announcement. It was a marked change to previous winners such as Bob Dylan, who took weeks to acknowledge the accolade, and Doris Lessing, who famously responded with a derisive "Oh Christ" when the news was broken to her by reporters.
"He was very charming, nice and well-versed, of course. He said he felt very grateful and honored, and that this is the greatest award you can receive," said Danius.