Cao Shunli, who died in mid-March at the age of 52, was hailed by the Martin Ennals Award organisers as an activist who since 2008 had "vigorously advocated for access to information, freedom of speech and freedom of assembly."
Bangladeshi activist Adilur Rahman Khan, who has worked to document extra-judicial killings, illegal detention and enforced disappearances was also nominated for the prize, as was migrant and indigenous community rights activist Alejandra Ancheita of Mexico.
Cao is the first person nominated posthumously for the prestigious prize, Michael Khambatta, a spokesman for the organisers said. He said the nominees were agreed upon before the news of her death emerged on March 14.
The dissident was detained last September shortly before she was due to travel to Geneva to attend a United Nations session on China's right's record.
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She had been denied medical treatment for several months after falling ill, according to her family and lawyers, who maintain she was only sent to hospital after suffering organ failure and falling unconscious in late February.
The Martin Ennals organisers deplored that Cao had already spent more than two years in China's "re-education through labour system" and met with "repeated harassment", before her final detention.
"This is a tragic example of reprisals suffered by human rights defenders who work with international human rights mechanisms," they said, calling for an independent probe into her death.
The Martin Ennals Award is named after the former secretary general of Amnesty International. It was constituted in 1993, two years after his death.
Its inaugural recipient in 1994 was also from China, rights activist and former political prisoner Harry Wu who moved to the United States in the mid-1980s and became its citizen in 1995. No Chinese national has won the award since.