UNESCO's director general, Audrey Azoulay, announced that she had received a letter on Sunday morning from the Nicaraguan government announcing its withdrawal because of the attribution of the UNESCO/Guillermo Cano World Press Freedom Prize.
"I regret this decision, which will deprive the people of Nicaragua of the benefits of cooperation, particularly in the fields of education and culture," Azoulay said in a statement.
"UNESCO is fully within its mandate when it defends freedom of expression and press freedom around the world."
Nicaragua was one of 194 member states in UNESCO.
The body's members set up the press freedom prize in 1997, and the 2025 award was attributed on Saturday to La Prensa on the recommendation of an international jury of media professionals.
"The newspaper La Prensa has made valiant efforts to bring the truth to the people of Nicaragua," President of the international jury of media professionals Yasuomi Sawa said.
"Like other civil society organisations, La Prensa has faced severe repression. Forced into exile, this newspaper bravely maintains the flame of press freedom."
La Prensa is Nicaragua's oldest newspaper and was founded in 1926.
It has confronted and survived three dictatorships, censorship, closures, attacks, the imprisonment of its journalists, and the assassination of its director, Pedro Joaquín Chamorro Cardenal, in 1978, according to the Inter American Press Association.
Authorities in Nicaragua tried to financially suffocate the newspaper by blocking the importation of paper since 2018.
It was forced to focus on digital news and suspend its print edition in August 2021 after "it was subjected to a violent police raid resulting in the confiscation of its assets, the freezing of its bank accounts, and the unjust imprisonment of its general manager," the association said.
"La Prensa has never ceased reporting for a single day. Its editorial team crossed into Costa Rica under emergency conditions and continues its work in exile today," the association said.
The awards ceremony will take place in Brussels, Belgium, on the sidelines of the World Press Freedom Conference on Wednesday.
"Each year, this prize reminds us of the importance of standing by those who protect and bring information to life," Azoulay said.
In announcing their UNESCO withdrawal, Nicaraguan authorities accused La Prensa of promoting "military and political interventions by the United States in Nicaragua" and denounced the award of the prize as the "diabolical expression of a traitorous anti-patriotic sentiment," UNESCO said.
Nicaragua's angry departure is a blow for the organisation that is also in the crosshairs of US President Donald Trump.
In an executive order in February, Trump called for a review of American involvement in UNESCO.
In his first term as president, the Trump administration in 2017 announced that the US would withdraw from UNESCO, citing anti-Israel bias.
That decision took effect a year later.
The United States formally rejoined UNESCO in 2023 after a five-year absence, under the presidency of Joe Biden.