"By granting the prize to Liu, the Nobel Committee has chosen someone who has been an eloquent and courageous spokesperson for the advance of universal values through peaceful and non-violent means, including his support for democracy, human rights, and the rule of law," Obama praised Liu in a statement.
"This award reminds us that political reform has not kept pace, and that the basic human rights of every man, woman and child must be respected. We call on the Chinese government to release Liu as soon as possible," the US president added.
"Last year, I noted that so many others who have received the award had sacrificed so much more than I. That list now includes Mr Liu, who has sacrificed his freedom for his beliefs," the 2009 winner said welcoming the Norwegian Nobel Committee's decision.
"As I said last year in Oslo, even as we respect the unique culture and traditions of different countries, America will always be a voice for those aspirations that are universal to all human beings."
The Nobel Committee on Friday, Oct 8 named Liu Xiaobo the winner of the Nobel Peace Prize despite warnings from the Chinese foreign ministry.
In Dec 2009, Liu was arrested and jailed for 11 years for co-authoring Charter 8, which calls for multiparty democracy and human rights in the communist nation.