"Today, we decided to let the world know that our hope for a better future stands in young people like Malala Yousafzai," said the chairman of the conservative European People's Party (EPP).
The 16-year-old is also one of the front runners for the Nobel Peace Prize which will be announced in Oslo on Friday.
Background
Malala Yousafzai, the Pakistani schoolgirl campaigner who survived a Taliban murder attempt last year, has become a global icon of the struggle for girls' education and peace.
In her courageous recovery from being shot in the head by a Taliban gunman, the 16-year-old has emerged as a beacon for all those who seek to overcome violence and intolerance with dignity.
She received a standing ovation for an address to the United Nations General Assembly in July in which she vowed she would never be silenced and on Thursday won EU's prestigious Sakharov human rights prize.
Malala first rose to prominence in 2009, aged just 11, with a blog for the BBC Urdu service chronicling life under Taliban rule in Swat, the beautiful valley in northwestern Pakistan where she lived.
Her struggle resonated with tens of thousands of girls denied an education by militants across northwest Pakistan, where the government has been fighting local Taliban since 2007.
When the army launched an offensive to oust the Taliban, Malala fled Swat with her family led by her father Ziauddin, school principal and himself a seasoned campaigner for education.
After this difficult period she resumed her work promoting education, received the first national peace award from the Pakistani government and was nominated for the International Children's Peace Prize.
But on October 9 last year the men with guns decided they could no longer tolerate the girl with a book and sent two hitmen to kill Malala on her school bus.
The Pakistani Taliban claimed the attack and warned that any woman who stood up to them would suffer a similar fate.
Incredibly she survived -- the bullet grazed her brain and travelled through her neck before lodging in her shoulder -- and as she lay fighting for life in hospital, Pakistan and the world united in horror.
After surgery in Pakistan, Malala was flown for further treatment to Britain, where six days after the attack she woke up.
"The first thing I thought was, 'Thank God I'm not dead.' But I had no idea where I was. I knew I was not in my homeland," Malala wrote in an autobiography published this week.
Eventually she recovered enough to continue her studies at school in the central city of Birmingham, where her family moved to join her.
There she learned to enjoy things one might expect of a British teenager -- TV shows like "Masterchef" and "Ugly Betty", fried chicken and cheesy potato snacks.
But her determination to campaign for education, fired by her own mother's illiteracy, remains undiminished.
In her speech given to the UN on her 16th birthday in July, Malala pledged herself to the fight for all children to go to school and said the Taliban attack would not silence her.
"Nothing changed in my life, except this: weakness, fear and hopelessness died. Strength, power and courage was born," she said.
Time magazine has listed Malala as one of the 100 most influential people in the world, and she has spoken of her desire to enter politics to change Pakistan and improve education.
For now, she is concentrating on spreading the simple message she spelt out at the UN: "One child, one teacher, one pen and one book can change the world."
AFP