Chan Marshall, who goes by the stage name Cat Power, beat nine other acts to win the industry award, which was judged by a panel of her peers.
This year Gary Lightbody, Ronnie Vannucci (The Killers), Franz Ferdinand and Wayne Coyne (The Flaming Lips) were among those who voted for Cat Power’s The Greatest to win the 2007 Shortlist Music Prize.
The album beat the recent releases of other finalists Hot Chip, Tom Waits, Bonnie Prince Billy, Joanna Newsom, Regina Spektor, Band of Horses, Beirut, Girl Talk and Spank Rock.
The Greatest has already been a critical and commercial success for Marshall, and will now feature in a special iTunes promotion as part of the prize.
This is the sixth year of the awards. Previous winners include Sigur Ros and Damien Rice.