Belarusian security police in July last year raided offices and homes of lawyers and human rights activists, detaining Byalyatski and others in a new crackdown on opponents of Lukashenko.
Authorities had moved to shut down non-state media outlets and human right groups after mass protests the previous August against a presidential election the opposition said was rigged.
Memorial was ordered to close after Russia's Supreme Court ruled in December 2021 that the umbrella organisation Memorial International and the Memorial Human Rights Center should be liquidated for violating the country's "foreign agents" law.
The court upheld its decision to shut down one of Russia's most venerated human rights groups on February 28.
The award, the first since Russia's February 24 invasion of Ukraine, has echoes of the Cold War era when prominent Soviet dissidents such as Andrei Sakharov and Alexander Solzhenitsyn won Nobels for peace or literature.
The prize will be seen by many as a condemnation of Russian President Vladimir Putin, who is celebrating his 70th birthday on Friday, and Belarus President Alexander Lukashenko, making it one of the most politically contentious in decades.
Nobel Committee Chair Berit Reiss-Andersen called on Belarus to release Byalyatski from prison and said the prize was not against Putin.
"The Norwegian Nobel Committee wishes to honour three outstanding champions of human rights, democracy and peaceful co-existence in the neighbour countries Belarus, Russia and Ukraine," said Reiss-Andersen.
"The Peace Prize laureates represent civil society in their home countries. They have for many years promoted the right to criticise power and protect the fundamental rights of citizens,"Reiss-Andersen added.
"They have made an outstanding effort to document war crimes, human rights abuses and the abuse of power. Together they demonstrate the significance of civil society for peace and democracy."
She called on Belarus to release Byalyatski from prison and said the prize was not against Putin.
"The (Nobel) Committee is sending a message that political freedoms, human rights and active civil society are part of peace," Dan Smith, head of the Stockholm International Peace Research Institute, told Reuters.
"Although Memorial has been closed in Russia, it lives on as an idea that it's right to criticize power and that facts and history matter," Smith added.
Memorial said on Friday that winning the award was a recognition of its human rights work and of colleagues who continue to suffer "unspeakable attacks and reprisals" in Russia.
Ukraine's human rights campaigners said they were in a "delightful shock" after learning they were among co-winners of Nobel Peace Prize.
"It was a complete surprise for us. Even half an hour ago we had no clue. We are in a delightful shock. We learnt about it literally 2 minutes before journalists started calling us," Anna Trushova,
Communications Manager for Ukraine's Center for Civil Liberties said.
The Nobel Peace Prize, worth 10 million Swedish crowns, or about $900,000, will be presented in Oslo on Dec. 10, the anniversary of the death of Swedish industrialist Alfred Nobel, who founded the awards in his 1895 will. The money comes from a bequest left by Nobel.
A week of Nobel Prize announcements kicked off Monday with Swedish scientist Svante Paabo receiving the award in medicine for unlocking secrets of Neanderthal DNA that provided key insights into our immune system.
Three scientists jointly won the prize in physics Tuesday. Frenchman Alain Aspect, American John F. Clauser and Austrian Anton Zeilinger had shown that tiny particles can retain a connection with each other even when separated, a phenomenon known as quantum entanglement, that can be used for specialized computing and to encrypt information.
The Nobel Prize in chemistry was awarded Wednesday to Americans Carolyn R. Bertozzi and K. Barry Sharpless, and Danish scientist Morten Meldal for developing a way of “snapping molecules together” that can be used to explore cells, map DNA and design drugs that can target diseases such as cancer more precisely.
French author Annie Ernaux won this year’s Nobel Prize in literature Thursday. The panel commended her for blending fiction and autobiography in books that fearlessly mine her experiences as a working-class woman to explore life in France since the 1940s.
The 2022 Nobel Prize in economics will be announced on Monday.
The prizes carry a cash award of 10 million Swedish kronor (nearly $900,000) and will be handed out on Dec. 10.