The Organisation for the Prohibition of Chemical Weapons (OPCW) has become the surprise choice for this year's Nobel peace prize, a decision the Oslo committee said recognised both its current, hazardous mission to destroy Syria's chemical weapons stocks and 16 years of wider global efforts.

The international chemical weapons watchdog, a relatively new global body, set up in 1997 in The Hague, with a relatively tiny annual budget of about £60m, trumped the established bookmakers' favourites of Malala Yousafzai, the Pakistani schoolgirl turned advocate for female education, and Denis Mukwege, the Congolese gynaecologist who has helped huge numbers of rape victims.

The announcement by the chairman of the Nobel committee, Thorbjørn Jagland, at 11am Oslo time (10am BST) was, nonetheless, not especially tense given that Norwegian state TV had reported the OPCW's success more than an hour beforehand.

The OPCW, which has 500 staff, is the 25th institution among the 94 winners in the prize's history, and the second in succession, after the controversial choice of the EU in 2012.

When news of its win leaked there was initial scepticism, with some Middle East analysts warning it was premature to honour the OPCW just a matter of weeks into its mission to assess and destroy Syria's chemical weapons stocks.

The mission – which has already seen OPCW inspectors come under sniper fire – was agreed as a means to avoid US-led military action against Syria following a gas attack blamed on forces loyal to Bashar al-Assad in August which killed more than 1,400 people.

However, the Nobel committee's citation said the prize was a more general one, to mark "its extensive efforts to eliminate chemical weapons" and nudge the few remaining nations that had not yet signed up to the organisation.

The work of the OPCW, which has 189 member states, had "defined the use of chemical weapons as a taboo under international law", the committee said, adding that events in Syria had "underlined the need to enhance the efforts to do away with such weapons".

It concluded: "Disarmament figures prominently in Alfred Nobel's will. The Norwegian Nobel committee has through numerous prizes underlined the need to do away with nuclear weapons. By means of the present award to the OPCW, the committee is seeking to contribute to the elimination of chemical weapons."

Addressing reporters, Jagland said the award was a reminder to nations with remaining chemical weapons, such as the US and Russia, to get rid of them, "especially because they are demanding that others do the same, like Syria".

He added: "We now have the opportunity to get rid of an entire category of weapons of mass destruction … That would be a great event in history if we could achieve that."

In a echo of the impossibility this week of tracking down the winners of the prizes for physics and literature, Peter Higgs and Alice Monro, the Nobel committee tweeted that it had been unable to immediately speak to the OPCW to formally let it know of the win.

At a later press conference in The Hague, the OPCW's director general, Ahmet Üzümcü, a Turkish former diplomat, said events in Syria had acted as a "tragic reminder" of the necessity of its work.

The organisation's "hearts go out to the Syrian people who were victims" of the August attack, he added. The £780,000 prize would be spent furthering the organisation's work, he added.

While the decision disappointed some, particularly those trumpeting the charismatic claims of Yousafzai, the decision marks something of a return to the tradition of honouring work directly connected to disarmament, after the EU in 2012 and the even more controversial prize to Barack Obama in 2009.

The OPCW was set up to implement the 1992 global chemical weapons convention. It says it has managed to oversee the destruction of more than 80% of the world's declared stocks of chemical weapons, excluding those now declared in Syria.

The US and Russia had committed to destroying their arsenals by 2012 but have as yet failed to do so.

Under a Russian-US deal struck last month, Syria must render useless all production facilities and weapons-filling equipment by November, a process begun over the past several weeks.