The prize, launched today to coincide with World Press Freedom Day, is open to print, online and broadcast journalists based in Europe, Africa, the Middle East, the Arab World, Latin America and the Caribbean as well as Asia and the Pacific.
According to a release from the organisers, first prize for winners in the print and online category is €5,000 (£4,500) with €2,500 for second place and €1,500 for third.
The winners in the television and radio categories will receive €5,000 each. An additional €5,000 is awarded to the winner of the grand prize.
"Every day, thousands of reporters put their lives in danger to report on conflicts, humanitarian disasters or simply to tell human stories," said European Commissioner for Development, Andris Piebalgs, in a release.
"In too many parts of the world press freedom is still undermined or violated and I will continue to defend this human right during my mandate ... This is why I'm very proud to be launching the annual Lorenzo Natali Prize, which will reward some of the most talented journalists reporting on development issues and contributing to our fight against poverty."
Last year's grand prize was awarded to Nicaraguan journalist Yader Francisco Luna Garcia for his article "Palabra de Mujer" or "Woman's Word", pubished by La Brujala Semanal.
BBC World Service journalist Mark Doyle received the special radio prize for his work Guinea on the Brink, about an attack by government troops on pro-democracy demonstrators in the country in 2009.
Established in 1992 by the Commission, the prize is named after former EC commissioner Lorenzo Natali, who died two years before in 1990.
Submissions need to have been published or broadcast during the period from 1 July 2010 to 31 August 2011. The deadline is 31 August 2011 and the winners will be announced at a ceremony in December 2011.
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