The award was given to Mandela by Nobel Prize-winning author Nadine Gordimer who described Mandela as one of the greatest men of the 20th century and a man who through his leadership and dedication to justice and equality had put morality back into government.
"Like Amnesty International, I have struggled for justice and human rights for long years," said Mandela when he accepted the award.
The 88-year-old former president looked frail and walked haltingly with a cane and with the help of an aide when he entered the hall to accept the award.
"I am retired from public life now, but as long as injustice and inequality exist in our world none of us can rest fully. We must become stronger," said Mandela.
Mandela spent 27 years as a prisoner of apartheid, most of it at hard labor at the maximum-security prison on Robben Island off the coast of Cape Town. Through smuggled messages, he continued to direct the anti-apartheid struggle from his cell.
He was released from prison in 1990 and led the negotiations that led to South Africa's first all-race election in 1994. He was elected as the first black leader of the country in that election and served just one term before he retired.
He shared the Nobel Peace Prize in 1993 with former President F.W. de Klerk, the last white leader of South Africa, and is credited as the major force in South Africa's largely peaceful transformation to democracy and majority rule.
"Mandela, through his fight and victory against apartheid, showed the world that no problem is too difficult to solve," said Amnesty International spokesman Bill Shipsey.
Since his retirement, Mandela has remained an outspoken advocate of human rights and at times has even criticized his own beloved African National Congress party for not doing enough for people infected with HIV.
On Wednesday, Mandela used his award to speak in defense of the poor.
"It is my fervent wish as I come together with human rights activists around the world today that we shine the candle of hope for the forgotten prisoners of poverty," said Mandela.
"It is people who have made poverty and tolerate poverty," he said, adding that overcoming poverty is an act of justice and a protection of human rights and dignity.
"While poverty exists," said Mandela, "there is no true freedom."
Previous winners of the award include Mary Robinson, the former United Nations Commissioner for Human Rights; former Czech President Vaclav Havel; and the Irish rock group U2.