Remembering the 80 million European victims of war and extremism last century, Jagland said "peace must not be taken for granted. We have to struggle for it everyday".
The ceremony in Oslo was attended by over 20 EU heads of state and government, including Sweden's ambassador to Oslo, and the prize was picked up by EU president Herman Van Rompuy, European Commission president Jose Manuel Barroso and European parliament president Martin Schulz.
Van Rompuy said that the EU could not be complacent with the financial crisis increasing tensions across borders.
"Europe is going through a difficult period," Van Rompuy said on the eve of the awards ceremony. "We will come out of this time of uncertainty and recession stronger than we were before".
The Norwegian Peace prize committee has been criticised for giving the EU the award when it faces such financial difficulties and divisions, but Chairman Thorbjörn Jagland defended the decision.
"We are not gathered here today in the belief that the EU is perfect," Jagland said. "Europe needs to move forward. Safeguard what has been gained. And improve what has been created, enabling us to solve the problems threatening the European community today," Jagland said.