The anual award is given to both a pop and classical artist with Cellist, Yo-Yo Ma, scooping the classical portion of the prize. Both artists will be given their prizes of one million kronor (£91,000) at the ceremony in Stockholm on August 28th.
Last year, the award was won by Patti Smith and Kronos Quartet. Founded in 1989 by Stig Anderson (former manager of ABBA), other previous Polar Prize winners include Elton John, Paul McCartney, Bjork and Bob Dylan.
Paul Simon was said to have won the award because of his "consummate skill, innovative arrangements and provocative lyrics. Nobody else is more deserving of the epithet of 'world-class songwriter'", according to The Royal Swedish Academy of Music.
"For five decades, Paul Simon has built bridges not only over troubled waters but over entire oceans by (re)joining the world's continents with his music. Paul Simon has compiled a library of songs which will remain open to future generations."
Paul Simon will is set to play Graceland in its entirety at this year's Hard Rock Calling in Hyde Park on July 15th.