Malala, 17, was shot in the head in 2012 by the Taliban near her home in Pakistan's Swat Valley for her advocacy of girls' right to go to school.
"Millions of children have voted to award Malala this year's World's Children's Prize for the rights of the child," the organisation said in a statement.
"Nobody has ever received the Nobel Peace Prize and the World's Children's Prize often dubbed the 'Children's Nobel Prize' by the media in the same year," it added.
The award was created in 2000 and is part a worldwide educational programme in which children learn about global issues, democracy and their own rights.
The programme finishes with a global vote on who to give the prize to.
This year's honorary awards went to former Microsoft executive John Wood, founder of the Room to Read literacy group, and Indira Ranamagar from Nepal, for her work for the children of prisoners.
Nelson Mandela, Graca Machel, Anne Frank and Kofi Annan have previously been honoured in the awards.
Malala will receive the prize at a ceremony in Mariestad near Stockholm on Wednesday. This year's laureates will share USD 100,000 to be used in their work for children's rights.