Mr Hassabis, 48, co-founded the artificial intelligence company that became Google DeepMind. Professor John Jumper, who worked with Mr Hassabis on the breakthrough, shares the award along with US-based Professor David Baker.
Mr Hassabis and Prof Jumper used artificial intelligence to predict the structures of almost all known proteins and created a tool called AlphaFold2.
The committee called it a "complete revolution" in chemistry, and the tool is now used for 200 million proteins worldwide.
Professor Baker used amino acids to design a new protein, opening the door to the creation of new proteins used in pharmaceuticals, vaccines and other tools.