A “landmark” novel written collaboratively by Aboriginal and non-Aboriginal storytellers, fusing pre-colonial Yolngu oral history with western novelistic storytelling, has won the $80,000 Prime Minister’s Literary award for fiction.

A Piece of Red Cloth, written by novelist Leonie Norrington, Merrkiyawuy Ganambarr-Stubbs and Yolngu knowledge holders Djawundil Maymuru and Djawa Burarrwanga, is set in a coastal north-east Arnhem Land community in the 1600s, when Makassan fishers, from what we now know as Indonesia, would trade with the Yolngu people during the wet season.

The novel traces a dramatic shift in this previously peaceful cultural exchange to a time when Dutch colonisers took control of the Makassar and the traders began using alcohol and opium to access to girls and young women.

Central to the novel is a Yolngu elder trying to protect her granddaughter from this new threat, one that Ganambarr-Stubbs has described as “a true history” that has been “sung and told orally from generations to generations”.

Speaking ahead of the ceremony held in Canberra on Thursday night, Norrington, who lived in the Barunga community in Arnhem Land, told Guardian Australia that the recognition of a pre-colonial Australian story by a prestigious award was particularly meaningful for her and Ganambarr-Stubbs.

“[It’s] important for us that this story has been taken seriously – that the foundation story of Australia is no longer Captain Cook,” Norrington said. “It’s about the people who were here before Captain Cook, and winning the prime minister’s award means that’s being acknowledged.”

The prize judges praised the novel as a “landmark achievement in fiction”, that was “setting a high benchmark for collaboration between Aboriginal and non-Aboriginal writers”.

“It is a profound work of remembrance and re-imagination, fusing oral history, novelistic technique and deep cultural knowledge,” the judges said.

Knowledge holder Djawundil Maymuru, who was crucial in the relaying of oral histories the book was based upon, died in 2025. The co-author spent much of her life working to bring Yolngu culture and history into the mainstream, Norrington said: “She would be absolutely thrilled that our story is getting this acknowledgment. We are all very proud.”

Also on Thursday, the nonfiction prize was awarded to investigative journalist Kate Wild for The Red House – her book about the death of Kumanjayi Walker, who was shot by Northern Territory police officer Zachary Rolfe in 2019. The judges described Wild’s book as “an utterly singular work, offering something nuanced, compassionate and new to a critical and ongoing national conversation.”

Zana Fraillon was awarded the prize for children’s literature for Song of a Thousand Seas, a “vivid, briny verse novel … written with depth, heart and care”, the judges said, about an octopus named Houdini who lives in an aquarium and misses the sea.

The Australian history prize was awarded to environmental historian Rohan Howitt for his first book, The Southern Frontier, which charts Australia’s possessive and enduring relationship with Antarctica.

Ender Başkan won the poetry prize for his debut collection Two Hundred Million Musketeers, depicting the intensity of life as a parent to young children.

The young adult literature prize was presented to Pip Harry for Drift, a coming-of-age story that navigates change, friendship loss and anxiety disorder in an “inventive and original” novel.

The Prime Minister’s Literary awards are the richest in the country, with a tax-free prize pool of $600,000.

Each category offers up to $100,000 in prize money: $80,000 tax-free for the winner and $5,000 for up to four shortlisted entries.