The award is named for Dutch philosopher and humanist scholar Desiderius Erasmus, who lived from 1466 to 1536.
The Praemium Erasmianum Foundation said in a statement that Noah, 39, was receiving the prize "for his inspired contribution to the theme 'In Praise of Folly,' named after Erasmus's most famous book, which is filled with humor, social criticism and political satire."
The foundation added: "With his sharp-minded, mocking yet inclusive political comedy, Noah, in the eyes of the jury, upholds the 'Erasmian Spirit.'"
Noah, who rose to prominence as a stand-up comic in his native South Africa, announced last year he was leaving American cable channel Comedy Central's "The Daily Show" after a seven-year run.
The Dutch foundation noted that Noah's time anchoring the satirical late night talk show coincided with the presidency of Donald Trump, the COVID-19 pandemic and the Black Lives Matter movement.
"With his astute reflections on such issues, he garnered a young, diverse and global audience and, in the process, infused a highly polarized media landscape with a breath of fresh air," the foundation said.
The award, which carries a cash prize of €150,000, is given annually to "a person or institution that has made an exceptional contribution to the humanities, the social sciences or the arts, in Europe and beyond," according to the foundation.
Previous winners include dissident playwright and former president of the Czech Republic Vaclav Havel, former United Nations High Commissioner for Human Rights Mary Robinson, the British artist Grayson Perry and online dictionary Wikipedia.
A ceremony to present Noah with the award is scheduled for the fall.