Debut novelist Tea Obreht has won the 2011 Orange Prize, the annual literary honour that celebrates female writers of English-language fiction.

The 25-year-old author was named the youngest-ever winner of the £30,000 (about $48,000 Cdn) prize, which she earned for her first book, The Tiger's Wife.Obreht received the award on Wednesday at the 16th Orange Prize gala at London's Royal Festival Hall.

The Tiger's Wife, which mixes realism and fantasy, is set in her native Balkans and follows a young doctor trying to unravel the death of her grandfather.

The novel is "an exceptional book" and its author "a truly exciting new talent," said jury chair Bettany Hughes.

"Obreht's powers of observation and her understanding of the world are remarkable. By skillfully spinning a series of magical tales she has managed to bring the tragedy of chronic Balkan conflict thumping into our front rooms," Hughes said.

"The book reminds us how easily we can slip into barbarity, but also of the breadth and depth of human love."

Born in the former Yugoslavia and raised in Cyprus and Egypt, Obreht moved to the U.S. in 1997. Now based in New York, her short stories have been anthologized and also published in magazines such as The New Yorker and The Atlantic.

She joins past Orange Prize winners such as Barbara Kingsolver, Zadie Smith, Andrea Levy and Carol Shields.

Canadian finalists

Irish-born, London, Ont.-based Emma Donoghue had been the finalist favoured to win the prize for her dark novel Room, a Man Booker nominee that also won the Rogers Writers' Trust Fiction Prize and a regional Commonwealth Writers' Prize.

The Orange Prize Youth Panel, a group of six teens who read the shortlisted novels, selected Donoghue's Room as its winner, with the author saying she was "tickled pink" to have appealed to the young readers.

Montreal-based Newfoundland author Kathleen Winter had also been in the running for her debut novel, Annabel. Rounding out the finalists were Scottish-Sierra Leonean writer Aminatta Forna (The Memory of Love), British writer Emma Henderson (Grace Williams Says it Loud) and American writer Nicole Krauss (Great House).