Paterson was born in China and later moved to the US
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US author Katherine Paterson was named winner of the Astrid Lindgren Memorial Award, which honours the best in children's writing.
The award, dedicated to the Swedish author of Pippi Longstocking, brings with it prize money of five million kroner (£367,800).
Paterson's books include The Master Puppeteer and Bridge to Terabithia, which is being made into a film.
She was honoured with the award for her "deft aesthetic touch".
Paterson, who was born in China before moving to the US, told a Swedish radio station she did not even realise she had been nominated this year when she was awoken with the news of her win.
The Swedish government set up the award following the death of Lindgren in 2002. Her enduring Pippi Longstocking character has been published for generations around the world.
The award is to be presented by Crown Princess Victoria at a ceremony in Stockholm on 31 May.