The 15,000-euro prize is presented annually in collaboration with the Kohler-Osbahr Foundation. Previous winners include Hans Werne Henze and Krzysztof Penderecki.
Tan Dun was given the prize in recognition of the connections his music has forged between East and West, according to his spokesperson.
Pierre Audi, artistic director of the Netherlands Opera, who directed the world premiere of Tan Dun's opera Tea, introduced the composer at the ceremony at the Wilhelm Lehmbruck Museum.
Tan Dun, Audi said, linked East and West with "with style, with depth, with invention. We are only halfway on the journey he has taken. His talent is to suggest dreams and make those dreams—his dreams—our own. Somehow East/West is no longer an issue. We stand face to face with ourselves."
In addition to Tea, Tan Dun's works include the Water Concerto for Water Percussion and Orchestra, the Water Passion After St. Matthew, the Oscar-winning score for the film Crouching Tiger, Hidden Dragon, and the operas Marco Polo and Peony Pavilion.