Otto, renowned for designs which incorporated lightweight tent-like structures, had been informed he had won the accolade shortly before his death, a statement said.
"Frei Otto's career is a model for generations of architects and his influence will continue to be felt," said Tom Pritzker, who chairs the foundation which bestows the honor.
"The news of his passing is very sad, unprecedented in the history of the prize. We are grateful that the jury awarded him the prize while he was alive."
Otto, who designed the distinct tented roof above Munich's Olympic Stadium, which hosted the 1972 Summer Games and the 1974 World Cup final, had been due to receive the award in Miami at a ceremony in May.
In comments by the architect made before his death, Otto said he had "never done anything to gain this prize."
"My architectural drive was to design new types of buildings to help poor people, especially following natural disasters and catastrophes," he said.
"So what shall be better for me than to win this prize? I will use whatever time is left to me to keep doing what I have been doing."
Pritzker organizers described Otto as a "distinguished teacher and author" who pioneered the use of modern lightweight structures for many uses.
"He believed in making efficient, responsible use of materials and that architecture should make a minimal impact on the environment," a statement said.
Otto was "a Utopian who never stopped believing that architecture can make a better world for all."
Peter Palumbo, the chairman of the Pritzker prize jury, described Otto as a "titan of modern architecture."
"His loss will be felt wherever the art of architecture is practiced the world over, for he was a universal citizen," Palumbo said in a statement.
Frei, and freedom
"Frei stands for Freedom, as free and as liberating as a bird in flight, swooping and soaring in elegant and joyful arcs," he added: "unrestrained by the dogma of the past, and as compelling in its economy of line and in the improbability of its engineering as it is possible to imagine, giving the marriage of form and function the invisibility of the air we breathe, and the beauty we see in Nature."
Born in 1925, Otto grew up in Berlin, where he later studied architecture. He flew in the Luftwaffe during World War Two, and spent time in a prisoner of war camp in France after his plane was shot down.
He resumed his studies after the war and spent time in the United States, where he visited studios of iconic mid-century designers such as Richard Neutra, Charles and Ray Eames and Frank Lloyd Wright.
As well as the roofing for the 1972 Olympics stadium in Munich, a backdrop which became synonymous with the murder of Israeli athletes by Palestinian militants during the games, Otto also helped design the Japan Pavilion at Expo 2000 in Hannover, Germany alongside another future Pritzker winner, Japan's Shigeru Ban, who won the award in 2014.