France’s oldest and most prestigious literary accolade, the Prix Goncourt, has been awarded to the Arabic and Persian scholar Mathias Énard for his novel Boussole (Compass).

The choice of Énard, who has received a succession of prizes for his work since 2003, justified his status as this year’s favourite for the award.

Boussole recounts how Frantz Ritter, an insomniac Austrian musicologist, takes to his sickbed in Vienna with an unspecified illness. Here he spends his days and sleepless nights musing on issues including his unrequited love for a Frenchwoman and the relationship between Europe and the Middle East.

The novel, Énard’s ninth published work, was described by his publishers as a “poetic eulogy to the long history of cultural exchanges between east and west”.

The prize, given to “the best and most imaginative prose work of the year”, is awarded annually by the Académie Goncourt. Previous winners include Marcel Proust, Simone de Beauvoir, André Malraux, Marguerite Duras, Jonathan Littell and Michel Houellebecq.

Its reward comes not in the prize money – at just €10 it is roughly the same amount as the first Prix Goncourt 1903 - but the massive book sales it guarantees, making the author a fortune.

The award was announced on Tuesday by the 10-member Goncourt Académy jury after a traditional lunch of lamb stew and olives at the Drouant restaurant near the Opera Garnier in Paris.

The shortlist had been revealed by the jury in Tunis as a mark of support for Tunisia’s fledgling democracy after the attack on the city’s Bardo Museum in March, when jihadi gunmen murdered 21 tourists and a police officer.

All four contenders for the prize touched on the west’s turbulent relationship with Islam and the Arab world.

An early favourite was the Algerian writer Boualem Sansal’s novel, 2084, a dystopian vision of a future Islamic caliphate that, for obvious reasons, was compared to George Orwell’s 1984. However, Sansal, who had received support from former winner Houellebecq, did not make the final four.

Énard, 43, born in Niort in south-west France, spent many years travelling across the Middle East after his studies. He settled in Barcelona in 2000, where he worked as a translator and taught Arabic at the Universitat Autònoma de Barcelona.

His first novel, La Perfection du Tir, published in 2003, centred on a sniper during the civil war in an unnamed country believed to be based on Libya, and revealed his obsession with death. It received rave critical reviews and a French language prize.

In 2008, he published Zone, which included a 500-page single sentence monologue about European cruelty and was given similar critical acclaim and three literary prizes.

His short story Parle-leur de Batailles, de Rois et d’Éléphants (Tell them about Battles, Kings and Elephants) was awarded the Lycéens Goncourt prize, which is judged by high school students, in 2010.

Last year’s Goncourt prize went to Lydie Salvayre for Pas Pleurer (Don’t cry).