The bookies' favourite, "Wolf Hall" is set in the 1520s and charts the rise of Thomas Cromwell, the son of a blacksmith who became the powerful chief minister to King Henry VIII, helping the monarch break the English Church's ties with Rome.
Mantel, 57, who spent five years writing "Wolf Hall" and is currently working on a sequel, said she "hesitated" for about 20 years before beginning to write the book.
But, she told an audience at the award ceremony Tuesday night, if winning the Booker Prize was like being in a train crash, "at this moment I am happily flying through the air".
The judges were split between Mantel and a rival author, whose identity they did not disclose. In the end, a secret ballot came out 3-2 in favour of "Wolf Hall".
The other short listed writers were J.M. Coetzee, A.S. Byatt, Sarah Waters, Simon Mawer and Adam Foulds.
Chairman of judges James Naughtie, said, "Hilary Mantel has given us a thoroughly modern novel set in the 16th century. `Wolf Hall' has a vast narrative sweep that gleams on every page with luminous and mesmerising detail." "It probes the mysteries of power by examining and describing the meticulous dealings in Henry VIII's court, revealing in thrilling prose how politics and history is made by men and women."
Naughtie conceded that it was not an easy read. "It is a challenging book. The narrative technique is innovative, the scope of it is vast. It's a book that demands hard work, but there's nothing wrong with that. Good things are worth working at."
"Wolf Hall", Mantel's 11th work of fiction, has so far sold 48,000 copies, an impressive number for a hardback historical novel.
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