The youngest person ever to receive the honour, she will be handed a gold medal and diploma at a ceremony in Oslo, joining the ranks of laureates including Nelson Mandela, Martin Luther King and Aung San Suu Kyi.
Ms Yousafzai began speaking out for the rights of girls at the age of 11.
The 17-year-old came to prominence after surviving an assassination attempt in October 2012, when her calls for equal rights angered militants in her native Pakistan.
She was just 15 when she was shot in the head by a Taliban gunman in Swat District, in the country’s north-western Khyber Pakhtunkhwa province.
Ms Yousafzai was airlifted first to Dubai and then on to Birmingham, where she was treated for life-threatening injuries at the Queen Elizabeth Hospital.
Unable to return to her homeland due to continued threats, she is now based in Birmingham.
She was in a chemistry class at Edgbaston High School for Girls in October when she learned she had won the prize — and decided to see out the rest of the school day before fronting a press conference.
Ms Yousafzai said then: “My message to children all around the world is that they should stand up for their rights.”
The Nobel Prize committee said: “Despite her youth, Malala Yousafzai has already fought for several years for the right of girls to education, and has shown by example that children and young people, too, can contribute to improving their own situations.
“This she has done under the most dangerous circumstances.
“Through her heroic struggle she has become a leading spokesperson for girls’ rights to education.”
Apathy is the biggest obstacle to eliminating forced child labour and the world needs more secular education to reduce intolerance, Nobel Peace Prize winner Mr Satyarthi has said.
In Oslo, where he will receive the award on Wednesday, Mr Satyarthi said the problem was not religion itself, but people who hide behind it for economic and political gain.
“Education brings tolerance to societies, which brings peace, global brotherhood and mutual respect for each other,” Mr Satyarthi, 60, said.
“There should be more value-oriented education with more human values,” said Mr Satyarthi.
The United Nations estimates that around 150 million children are routinely engaged in paid or unpaid work with children in sub-Saharan Africa at greatest risk, where up to a quarter of those aged between 5 and 14 are forced to work.
“The single biggest difficulty has been apathy,” Mr Satyarthi said.
“People are getting more and more materialistic and more consumeristic.”
He said there was a lack of compassion around the world for the poorest and most vulnerable in society, who lacked the means and power to help themselves.
Education has been a major issue in India since the Hindu nationalist government came to power in May, with critics citing a move to teach the superiority of Hindu values and mythology at the cost of academic rigour, going against the grain of secularism that runs through multi-faith modern India.
Ms Yousafzai has dominated Noble coverage in the media but Mr Satyarthi said he did not mind.
“I never in my life tried to be in the limelight because I work with children who are most invisible,” Mr Satyarthi said.
“My cause had remained invisible for years and so did I.
“Malala is a wonderful girl, she’s like my daughter, I adore and respect her a lot.”
Mr Satyarthi dismissed the idea that violence against girls in the Muslim world was a factor of religion itself.
“The very meaning of Islam is love and humanity,” he said. “Some people use politics, businesses or religion for their short-term benefits and gains.”
Mr Satyarthi, who gave up a career as an electrical engineer in 1980 to campaign against child labour, has headed various forms of peaceful protest.
His non-government organisation Bachpan Bachao Andolan (BBA) has been credited with freeing more than 80,000 child labourers in India over 30 years. He estimates that about 60 million children are still at work.