Sometimes compared to Samuel Beckett, another Nobel-winning playwright, Fosse's work is minimalistic, relying on simple language which delivers its message through rhythm, melody and silence.
The Swedish Academy said the 64-year-old was honoured "for his innovative plays and prose which give voice to the unsayable."
Fosse's writing is defined more by form than content, where what is not said is often more revealing than what is.
"Fosse presents everyday situations that are instantly recognisable in our own lives. His radical reduction of language and dramatic action expresses the most powerful human emotions of anxiety and powerlessness in the simplest terms," the jury said.
"I am overwhelmed and grateful. I see this as an award to the literature that first and foremost aims to be literature, without other considerations," Fosse said in a statement.
Speaking to Norwegian public broadcaster NRK, he said he was "surprised but also not," after his name had been mentioned in Nobel speculation for several years.
"While he is today one of the most widely performed playwrights in the world, he has also become increasingly recognised for his prose," the jury said.
Fosse's oeuvre, written in Nynorsk -- a written form of Norwegian used by 10 percent of the population -- spans a variety of genres and consists of plays, novels, poetry collections, essays, children's books and translations.
The chairman of the Nobel committee, Anders Olsson, told reporters Fosse had come to be regarded as an innovator through his "ability to evoke man's loss of orientation, and how this paradoxically can provide access to a deeper experience, close to divinity."
His major works include "Boathouse" (1989), which was well-received by critics, and "Melancholy" I and II (1995-1996).
Playwriting was 'made for me'
Born among the fjords of western Norway, Fosse is usually seen clad in black with a few days' stubble.
He grew up in a family which followed a strict form of Lutheranism and rebelled by playing in a band and declaring himself an atheist.
He ended up converting to Catholicism in 2013.
After studying literature, he made his debut in 1983 with the novel "Red, Black" which moves back and forth in time and between perspectives.
His latest book, "Septology," a semi-autobiographical magnum opus -- seven parts spread across three volumes about a man who meets another version of himself -- runs to 1,250 pages without a single full stop.
The third volume was shortlisted for the 2022 International Booker Prize.
Struggling to make ends meet as an author in the early 1990s, Fosse was asked to write the start of a play.
"I knew, I felt, that this kind of writing was made for me," he once said in an interview with a French theatre website.
Global acclaim
He enjoyed the form so much he wrote the entire play, entitled "Someone is Going to Come", which gave him his international breakthrough when it was staged in Paris in 1999.
"Even in this early piece, with its themes of fearful anticipation and crippling jealousy, Fosse's singularity is fully evident. In his radical reduction of language and dramatic action, he exposes human anxiety and ambivalence at its core," Olsson said.
Fosse went on to win international acclaim for his next play, "And We'll Never be Parted", in 1994.
According to his Norwegian publisher, Samlaget, his plays have been staged more than a thousand times around the world.
His work has been translated into around 50 languages.
"I don't write about characters in the traditional sense of the word. I write about humanity," Fosse told French newspaper Le Monde in 2003.
Inevitably compared with Norway's national playwright Henrik Ibsen, Fosse won the International Ibsen Award, one of the theatre world's most prestigious prizes, in 2010.
After longstanding accusations that the Nobel is a male-dominated prize, followed by a devastating #MeToo scandal in 2018, the Swedish Academy has vowed a more global and gender-equal literature prize.
In the years since, it has honoured three women -- France's Annie Ernaux, US poet Louise Gluck and Poland's Olga Tokarczuk -- and three men -- Austrian author Peter Handke, Tanzanian writer Abdulrazak Gurnah and Fosse.
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