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The prize was awarded Monday for her contributions to global peace and relief for children maimed by war.
Phuc, 55, now lives in Canada. She was given the prize as a goodwill ambassador for UNESCO and founder of the Kim Phuc Foundation, which provides medical and psychological assistance to child victims of war. The prize has a cash award of 10,000 euros ($11,350).
The Internationaler Friedenspreis Dresden-Preis, which initiated and offered the Dresden Peace Prize, noted that at a time when hate is widespread, "it is repeatedly the victims of violence and war who renounce hate.
"And in doing so they demonstrate human greatness, to the shame of preachers of hate. Kim Phuc Phan Thi has shown just such greatness and so has become a worldwide exemplar," the organization said in a press release.
The award ceremony took place Monday night at the Semper Opera in Dresden, Germany.
The black and white ‘Napalm Girl’ photo, officially named 'The Terror of War,' depicted a terrified Phuc running naked and screaming after being burned in a napalm attack on June 8, 1972.
The photograph won its author, Vietnamese-American photojournalist Nick Ut, the 1973 Pulitzer Prize for Spot News Photography.
Nick Ut, whose real name is Huynh Cong Ut, once said he cried when he saw Phuc running.
"If I had not saved Kim Phuc that day, I think I would have killed myself," he said.
Ut and Kim Phuc remain close friends to this day.
The Dresden Peace Prize, first awarded in 2010, was founded to honor the "brave, the tolerant, the humane from all over the world," the prize’s official website states.
