The 71-year-old's latest film "Amour", about a couple trying to come to terms with sickness and old age, won the Oscar for best foreign movie in February after winning the Palme d'Or at the Cannes Film Festival last year.
Haneke beat Cuban choreographer Carlos Acosta Quesada, Serbian artist Marina Abramovic, Estonian composer Arvo Part and US painter Bruce Nauman in the race for the Prince of Asturias prize worth €50,000 euros ($65,000 dollars).
"When I make a movie, I want people to feel emotions and if I achieve this I am happy," he told reporters in Madrid in February during the presentation of another project, his staging of Mozart opera "Cosi Fan Tutte".
"Amour" stars two French film legends, Emmanuelle Riva, 85, and Jean-Louis Trintignant, who is 81.
They play a loving, elderly Parisian couple. When Anne, played by Riva, has a stroke, her husband is left to care for her.
The prize is awarded each year to a person, group or institution whose work in cinema, dance, music or other forms of art "constitute a significant contribution to mankind's cultural heritage."
Last year it went to Spanish architect Rafael Moneo. Other previous winners include Oscar-winning Spanish director Pedro Almodovar, Grammy-winning US singer Bob Dylan and British architect Norman Foster.
The Prince of Asturias awards are also given in the fields of communication and humanities, scientific and technical research, social science, letters, international cooperation, international understanding and sport.
Named after Crown Prince Felipe of Spain, the prizes are presented in the northern Spanish city of Oviedo, capital of the northern Asturias region, in a glittering ceremony broadcast live on Spanish television in October.