Hansen, a staff photographer for the Dagens Nyheter newspaper, shot the image of the funeral procession carrying two-year-old Suhaib Hijazi and his three-year-old brother Muhammad down an alley in Gaza City on November 20 last year.
The children's father Fouad was carried behind his children in the procession. The mother was put in intensive care.
"The strength of the pictures lies in the way it contrasts the anger and sorrow of the adults with the innocence of the children," Mayu Mohanna, a jury member from Peru, told AFP.
"It's a picture I will not forget."
World Press Photo is one of photojournalism's most prestigious contests.
Earlier this month, Hansen was also named the 2012 Newspaper Photographer of the year in the 70th Pictures of the Year International competition.
Hansen was honoured for his portfolio which includes coverage of the Israel-Palestine conflict and a series on individuals whose lives were affected by the mass murders on the Norwegian island of Utoya in July 2011.